Expected to edge higher and test 0.5920 – UOB Group

There has been a tentative buildup in upward momentum; NZD is expected to edge higher and test 0.5920. In the longer run, outlook remains mixed, but NZD is likely to trade in a tighter range of 0.5835/0.5985, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Outlook for NZD remains mixed

24-HOUR VIEW: “Our view for NZD to ‘drift lower and test 0.5855’ last Friday did not turn out. NZD traded between 0.5866 and 0.5917, closing little changed at 0.5880 (+0.08%). There has been a tentative buildup in upward momentum. Today, we expect NZD to edge higher, but as momentum is not strong, any advance is likely limited to a test of 0.5920. We do not expect the major resistance at 0.5985 to come into view. To sustain the momentum buildup, NZD must remain above 0.5860 (minor support is at 0.5875).”

1-3 WEEKS VIEW: “Last Wednesday (14 May, spot at 0.5935), we highlighted that ‘the recent price movements have resulted in a mixed outlook.’ We added, ‘for the time being, we expect NZD to trade in a 0.5835/0.6030 range.’ The outlook remains mixed, but we now expect a tighter range of 0.5835/0.5985.”