UOB Group’s FX Strategists noted NZD/USD’s upside is predicted to meet a solid resistance above the 0.7200 mark.
Key Quotes
24-hour view: “After the strong surge in NZD last Friday (03 Sep), we highlighted yesterday (06 Sep) that ‘the sharp and rapid rise appears to be overdone and NZD is unlikely to strengthen further’. We expected NZD to ‘consolidate and trade within a 0.7120/0.7170 range’. Our view for consolidation was not wrong even though NZD traded within a narrower range than expected (0.7128/0.7167). The current movement is still viewed as part of a consolidation but the slightly firmed underlying tone suggests a higher trading range of 0.7130/0.7175 range.”
Next 1-3 weeks: “There is not much to add to our update from yesterday (06 Sep, spot at 0.7150). As highlighted, the sharp and rapid rise from last Friday appears to be running ahead of itself and it is left to be seen if the next major resistance at 0.7210 would come into the picture this time round. That said, the current NZD strength that started about 2 weeks ago (see annotations in the chart below) is deemed intact as long as 0.7080 is not breached (no change in ‘strong support’ level from yesterday).”
