May try to breach 0.6290 – UOB Group

Instead of continuing to rise, New Zealand Dollar (NZD) is likely to trade in a range of 0.6230/0.6290. In the longer run, NZD is expected to continue to advance; it remains to be seen if the y-t-d high of 0.6320 is within reach, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann notes.

Bulls are pushing towards 0.6290

24-HOUR VIEW: “After our expectation for NZD to test 0.6265 two days ago did not materialise, we highlighted yesterday that ‘the underlying tone still seems firm, and we continue to see chance for NZD to test 0.6265.’ However, we held the view that ‘a sustained rise above this level appears unlikely.’ NZD rose more than expected, as it soared to 0.6298, and then pulled back sharply, closing at 0.6257 (+0.18%). The pullback in overbought conditions suggests that instead of continuing to rise, NZD is likely to trade in a range of 0.6230/0.6290.”

1-3 WEEKS VIEW: “Our most recent narrative was from Monday (26 Aug, spot at 0.6230), wherein “while we continue to expect NZD to advance, conditions are severely overbought, and it remains to be seen if the year-to-date high of 0.6320 is within reach.” Yesterday, although NZD rose to 0.6298, there is no clear increase in momentum. In other words, it remains to be seen if the y-t-d high of 0.6320 is within reach. On the downside, a breach of 0.6200 (‘strong support’ level previously at 0.6180) would indicate that NZD is not strengthening further.”