A test of 0.6100 emerges on the horizon – UOB

In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, NZD/USD could advance to the 0.6100 region in the short-term horizon.

Key Quotes

24-hour view: Yesterday, we expected NZD to edge higher to 0.6020 before easing. We also expected the major resistance at 0.6055 not to come into view. NZD rose above 0.6020 but did not ease; neither did it reach 0.6055 (high has been 0.6044). In view of the improved momentum, NZD is likely to break above 0.6055. This time around, the next major resistance at 0.6100 is likely out of reach for now. Support is at 0.6020, followed by 0.6000. 

Next 1-3 weeks: Our most recent narrative was from last Wednesday (15 Nov, spot at 0.6000), wherein while NZD “is likely to strengthen further, it has to break clearly above 0.6055 before an advance to 0.6100 is likely.” Yesterday (20 Nov), NZD rose to a high of 0.6044. The increase in momentum suggests that a break of 0.6055 will not be surprising. As indicated, a breach of this level is likely to lead to further advance to 0.6100. To keep the momentum going, NZD must stay above 0.5970 (‘strong support’) level previously at 0.5920.