Further New Zealand Dollar (NZD) strength is not ruled out; severely overbought conditions suggest any advance is likely limited to a test of 0.6260, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
NZD may try to test 0.626
24-HOUR VIEW: “Our view of sideways trading last Friday was incorrect, as NZD surged to a high of 0.6236, closing on a strong note at 0.6233 (+1.51%). While further advance is not ruled out, severely overbought conditions suggest any advance is likely limited to a test of 0.6260. The major resistance at 0.6320 is not expected to come under threat. Support levels are 0.6205 and 0.6180.”
1-3 WEEKS VIEW: “We highlighted last Thursday (22 Aug, spot at 0.6160) that ‘overbought advance doesn’t seem to be losing steam yet.’ We held the view that NZD could potentially reach June’s 2023 high of 0.6223.’ Last Friday, NZD broke above 0.6223, surging by 1.51% (NY close of 0.6233). From here, we continue to expect NZD to advance. The next significant resistance lies at the year-to-date high of 0.6320. As conditions are severely overbought, it remains to be seen if this level is within reach. To sustain the overbought momentum, NZD must not break below 0.6140 (‘strong support’ level previously at 0.6090).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD consolidates near 19-month peak as traders await US PCE Price Index
AUD/USD oscillates in a range below the 0.6900 mark, as traders opt to move to the sidelines ahead of the US PCE Price Index. In the meantime, the RBA's hawkish stance, the optimism led by additional monetary stimulus from China, the prevalent risk-on mood, and a bearish USD continue to act as a tailwind for the pair.
EUR/USD rebounds on Thursday after midweek pullback
EUR/USD tuned back into the high end on Thursday, getting bolstered by a broad-market selloff in the Greenback. US data that printed better than expected helped to ease concerns of a possible economic slowdown within the US economy looming over the horizon.
Gold price holds steady near record peak; looks to US PCE data from fresh impetus
Gold price consolidates below the all-time high set on Thursday amid overbought conditions on the daily chart and the risk-on mood, though dovish Fed expectations continue to act as a tailwind. Bulls, meanwhile, prefer to wait for the release of the US PCE Price Index before placing fresh bets.
Ethereum investors show bullish bias amid ETF inflows and positive funding rates, exchange reserves pose risk
Ethereum traded around $2,640 on Thursday, up more than 2% following increased bullish bias among investors, as evidenced by ETH ETF net inflows and an uptrend in funding rates. However, investors may be wary of a potential correction from ETH's rising exchange reserve.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.