Extra upside in the NZD/USD is likely once 0.7070 is cleared, according to UOB Group FX Strategists.
Observation for 24 hours: “”There is room for the NZD to hit 0.7045 initially before softening,” we said yesterday. The NZD traded calmly inside a 0.7009/0.7035 range before jumping above 0.7045 during early Asian hours, contrary to our forecasts. The upward momentum has increased, and the New Zealand dollar is likely to continue to rise, although a sustained rise above the significant resistance level of 0.7570 seems improbable (next resistance is at 0.7095). 0.7030 is the first level of support, followed by 0.7010.”
Within the next 1-3 weeks: “Yesterday (05 Jul, spot at 0.7020), we stated that “the downside risk has disappeared” and that the NZD “may trade between 0.6960 and 0.7070.” Even though the shorter-term upward momentum is beginning to improve, our outlook has not changed. However, before a rise above 0.7095 may be predicted, NZD must close above 0.7070. The chances of NZD closing above 0.7070 are not large at this time, but they will remain intact as long as NZD does not go below the’strong support’ level of 0.6990 in the coming days.”/n
