NZD/USD: Potential gains could retest 0.6735 – UOB

NZD/USD could extend the uptrend to the 0.6735 level in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for NZD to ‘trade sideways’ was incorrect as it soared and closed on a firm not at 0.6680 (+0.62%). Rapid build-up in momentum is likely to lead to further NZD strength. However, any advance is unlikely to challenge last week’s high at 0.6735 (there is another resistance at 0.6720). Support is at 0.6665 but only a breach of 0.6650 would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Our view from Tuesday (15 Feb, spot at 0.6620) where a break of 0.6580 could trigger a decline in NZD was invalidated as it rose above our ‘strong resistance’ level of 0.6690 after NY close. The rapid rise has shifted the risk to the upside and NZD could strengthen to 0.6735. Looking ahead, the next resistance above 0.6735 is at 0.6765. Overall, only a breach of 0.6635 (‘strong support’ level) would indicate that the upside risk has dissipated.”