NZD/USD: Set to trade with an upward bias – UOB Group
|The New Zealand Dollar (NZD) is expected to trade with an upward bias. It remains to be seen if it can breach the strong resistance level at 0.6105, because downward momentum has slowed further, UOB Group analysts note.
A breach of 0.6105 to turn NZD positive
24-HOUR VIEW: “Yesterday, we held the view that NZD ‘could pullback further, but any decline is unlikely to reach the major support at 0.6040.’ We indicated that ‘resistance levels are at 0.6085 and 0.6105.’ Our view was not wrong, as NZD dipped to a fresh one-month low of 0.6048 before rebounding. Not only has downward momentum faded, but upward momentum has also increased to some extent. Today, we expect NZD to trade with an upward bias, but it remains to be seen if it can breach the strong resistance level at 0.6105. Support levels are at 0.6065 and 0.6050.”
1-3 WEEKS VIEW: “We have expected NZD to weaken since the middle of last month. In our latest narrative from Monday (01 Jul, spot at 0.6095), we indicated that ‘while there is still room for NZD to continue to weaken, the slowdown in momentum suggests 0.6040 could be out of reach this time.’ Yesterday, NZD dipped to 0.6048 and then rebounded, closing largely unchanged at 0.6078 (+0.05%). Downward momentum has slowed further, and if NZD breaches 0.6105 (‘strong resistance’ level previously at 0.6135), it would mean that the weakness in NZD has stabilised.”
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