NZD/USD POINTS TO FURTHER CONSOLIDATION – UOB

According to FX Strategists at UOB Group, NZD/USD is now seen within 0.6820-0.6950 range in the next weeks.

KEY QUOTES

24-hour view: “Our expectation for NZD to ‘trade sideways between 0.6810 and 0.6865’ yesterday was incorrect as it soared to 0.6903 before closing on a firm note at 0.6891 (+0.75%). The rapid advance appears to be running ahead of itself and NZD is unlikely to strengthen much further. For today, NZD is more likely to consolidate and trade within a 0.6840/0.6915 range.”

Next 1-3 weeks: “We turned negative on NZD last Wednesday (18 Aug, spot at 0.6925). As NZD declined, in our latest narrative from last Friday (20 Aug, spot at 0.6830), we indicated that “a break of 0.6800 appears likely”. NZD subsequently dropped to 0.6807 but yesterday, it rebounded sharply and took out our ‘strong resistance’ level at 0.6895 (high of 0.6903). Downward momentum has more or less dissipated and 0.6807 is deemed as the extent of NZD weakness. The current movement is viewed as the early stages of a consolidation phase and NZD is likely to trade between 0.6820 and 0.6950 for now.”