NZD/USD now moved into a consolidative phase – UOB

NZD/USD is forecast to trade between 0.6960 and 0.7105 in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected NZD to strengthen yesterday, we were of the view that ‘the strong resistance at 0.7050 is unlikely to come under threat’. The subsequent NZD strength exceeded our expectation by a fair bit as it rose to 0.7069. The rapid rise appears to be running ahead of itself but there is room for the advance in NZD to test 0.7075 first before easing. The next resistance at 0.7105 is not expected to come into the picture. On the downside, a break of 0.7015 (minor support is at 0.7030) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We highlighted yesterday (23 Jun, spot at 0.7015) that ‘downward momentum is beginning to wane’ and ‘the odds for NZD to weaken to 0.6870 have diminished’. The subsequent break of our ‘strong resistance’ level at 0.7050 (high has been 0.7069) indicates that the weak phase in NZD that started early last week has come to an end. The current movement is viewed as the early stages of a consolidation phase and NZD is likely to trade between 0.6960 and 0.7105 for now.”