Likely to trade between 0.5740 and 0.5800 – UOB Group

New Zealand Dollar (NZD) could trade within a relatively broad range between 0.5740 and 0.5800. In the longer run, there has been a slight increase in upward momentum; for a continued rise, NZD must first close above 0.5800, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Slight increase in upward momentum

24-HOUR VIEW: “The following are excerpts from our update last Friday: ‘The slight increase in upward momentum may lead to NZD testing the major resistance at 0.5770 today. A clear break above this level appears unlikely for now. Support is at 0.5735; a breach of 0.5725 would indicate that the current mild upward pressure has faded.’ NZD then rose to 0.5780, pulled back to 0.5738, and then closed at 0.5747 (- 0.10%). NZD rose sharply on the open today before pulling back again. The price action provides no fresh clues. Today, NZD could trade within a relatively broad range between 0.5740 and 0.5800.”

1-3 WEEKS VIEW: “We have held a neutral NZD stance since the middle of the month. In our latest narrative from last Thursday (23 Oct, spot at 0.5740), we highlighted that “while the outlook for NZD remains neutral, a narrower range of 0.5700/0.5770 is likely sufficient to contain the price movements for now.” Although NZD rose above 0.5770 on Friday, it pulled back to close lower at 0.5747 (-0.10%). There has been a slight increase in momentum, but for a continued rise, NZD must first close above 0.5800. The likelihood of NZD closing above 0.5800 is not high, but it will remain intact as long as the ‘strong support’ level, now at 0.5715, is not breached.”