NZD/USD points to further upside near-term – UOB

Upward momentum in NZD/USD now looks improved, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sharp and swift rise in NZD to 0.7198 came as a surprise (we were expecting NZD to consolidate). Despite the strong advance, upward momentum has not improved by as much. However, there is scope for NZD to test 0.7215. For today, the next resistance at 0.7240 is unlikely to come under threat. Support is at 0.7165 followed by 0.7140.”

Next 1-3 weeks: “We have expected NZD to strengthen since the middle of last week. Yesterday (19 Apr, spot at 0.7135), we noted that ‘overbought shorter-term conditions could lead to a couple of days of consolidation first’. Instead of consolidating, NZD soared to 0.7198, close to our initial ‘objective’ at 0.7200. While upward momentum has improved, it appears a bit ‘tentative’ for now. That said, the risk is still on the upside but the next resistance at 0.7240 may not come into the picture so soon. On the downside, a break of 0.7120 (‘strong support’ level was at 0.7065 yesterday) would indicate that NZD strength has run its course.”