Can edge higher to 0.6075 – UOB Group

Instead of continuing to advance, the New Zealand Dollar (NZD) is more likely to trade in a 0.5980/0.6040 range. In the longer run, upward momentum is building tentatively; NZD could edge higher to 0.6075, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

NZD likely to trade in a 0.5980/0.6040 range

24-HOUR VIEW: “Yesterday, we highlighted that NZD ‘could drop to 0.5900 before the risk of a more sustained recovery increases.’ However, NZD rebounded from a low of 0.5933 to 0.6037, closing sharply higher by 1.41% at 0.6023. The sharp rebound appears to be running ahead of itself, and instead of continuing to advance, NZD is more likely to trade in a 0.5980/0.6040 range.”

1-3 WEEKS VIEW: “NZD dropped to a 3-month low of 0.5912 two days ago. Yesterday (07 Nov), when NZD was at 0.5935, we highlighted that ‘Although the increase in momentum indicates further NZD weakness, conditions remain oversold due to the recent month-long decline.’ We pointed out that ‘the potential of any weakness may be limited.’ We also pointed out that ‘as long as 0.6015 is not breached, NZD could drop to 0.5875 before a rebound is likely.’ We did not expect NZD to rebound so quickly and sharply, as it soared to 0.6037. Downward momentum has faded. Upward momentum is beginning to build, albeit tentatively. From here, as long as 0.5955 is not breached, NZD could edge higher to 0.6075. Currently, the chance of a sustained break above this level is not high.”