NZD/USD: Still room for further upside – UOB

In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, extra gains in NZD/USD appears on the cards in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that NZD ‘is likely to trade sideways between 0.6340 and 0.6415’. However, NZD rose to a high of 0.6426, dropped to 0.6363 before closing little changed at 0.6382 (-0.05%). Upward momentum has improved a tad and NZD could test 0.6430 first before the risk of a more sustained pullback increases. The major resistance at 0.6470 is not expected to come into view. Support is at 0.6370, followed by 0.6350.”

Next 1-3 weeks: “Last Friday (13 Jan, spot at 0.6390), we highlighted that while the bias for NZD is on the upside, lackluster momentum suggests the chance of a break of the major resistance at 0.6475 is not high. Yesterday, NZD rose to a high of 0.6426 before pulling back. There is no significant improvement in momentum and we continue to hold the same view. Overall, only a breach of 0.6325 (‘strong support’ level previously at 0.6305) would indicate that the upward bias has faded.”