The stance for NZD/USD remains firm and could attempt a move to the 0.7330 level in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “We highlighted yesterday that ‘overbought conditions suggest NZD is unlikely to strengthen much further’. We added, ‘NZD could edge above 0.7300 but the next major resistance at 0.7330 is not expected to come under threat’. Our view was not wrong as NZD rose to 0.7304 before pulling back sharply. Upward momentum has eased and the current movement is viewed as part of a consolidation. For today, NZD is likely to trade between 0.7230 and 0.7290.”
Next 1-3 weeks: “Our update from yesterday (10 May, spot at 0.7285) still stands. As highlighted, NZD could advance but the major resistance at 0.7330 may not come into the picture so soon. NZD subsequently rose to 0.7304 before pulling back. Overbought shorter-term conditions could lead to a few days of consolidation first but the overall positive outlook is intact as long as NZD does not break 0.7215 (no change in ‘strong support’ level).”
