NZD/USD faces some renewed consolidation – UOB

In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, NZD/USD is likely to trade within the 0.5950-0.6085 range in the near term.

Key Quotes

24-hour view: We highlighted yesterday that “upward momentum is showing signs of slowing, and this, combined with overbought conditions suggests NZD is likely to trade sideways today, probably in a range of 0.6025/0.6075.” Instead of trading in a range, NZD fell to a low of 0.5998 before rebounding. The brief drop to 0.5998 lacks momentum, and NZD is unlikely to weaken much further. Today, NZD is more likely to trade in a range of 0.5995/0.6055. 

Next 1-3 weeks: Yesterday (22 Nov, spot at 0.6050), we indicated “while the NZD strength that started one week ago is intact, overbought short-term conditions could lead to a couple of days of consolidation first.” We added, “if NZD breaks below 0.6000, it would mean that 0.6100 is out of reach. In NY trade, NZD broke slightly below 0.6000 (low of 0.5998). The breach of the ‘strong support’ at 0.6000 indicates that the recent buildup in upward momentum has eased. From here, NZD is likely to trade in a range, probably between 0.5950 and 0.6085.