NZD/USD potential for further upside – UOB

FX Strategists at UOB Group remain neutral on the Kiwi Dollar, although they noted the pressure has now shifted to the upside.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as NZD rose strongly to hit an overnight high of 0.7324. While upward momentum is not very strong, another ‘up-leg’ would not be surprising even though the major 0.7355 resistance is likely out of reach (0.7330 is already quite a strong level). Only a move back below 0.7280 would indicate that a short-term top is in place (minor support is at 0.7295)”.

Next 1-3 weeks: “NZD touched a low of 0.7244 last Friday, just a few pips above the ‘key support’ highlighted at 0.7240 in recent updates. As mentioned, as long 0.7240 is intact, the immediate risk is for a move towards last month’s 0.7355 top. That said, the prospect for a sustained move above this level is deemed as low. Looking further ahead, a dip below 0.7240 would not change the current neutral outlook but indicate that NZD has moved into a lower consolidation range”.