New Zealand Dollar (NZD) is expected to continue to advance; it remains to be seen if the y-t-d high of 0.6320 is within reach, UOB Group analysts Quek Ser Leang and Lee Sue Ann note.

NZD targets 0.6320

24-HOUR VIEW: “After NZD rose two days ago, we indicated yesterday that ‘despite the relatively sharp advance, upward momentum has not increased much.’ We held the view that ‘provided that 0.6215 is not breached, NZD could test 0.6265 before the advance might pause.’ NZD subsequently rose to 0.6254, closing at 0.6246 (-0.11%). The underlying tone still seems firm, and we continue to see chance for NZD to test 0.6265. A sustained rise above this level appears unlikely. Support levels are at 0.6235 and 0.6220.”

1-3 WEEKS VIEW: “Two days ago (26 Aug, spot at 0.6230), we highlighted that while we continue to expect NZD to advance, conditions are severely overbought, and it remains to be seen if the year-to-date high of 0.6320 is within reach. There is no change in our view. On the downside, should NZD break below 0.6180 (no change in ‘strong support’ level), it would indicate that NZD is not strengthening further.”