Provided that 0.6215 is not breached, the New Zealand Dollar (NZD) could test 0.6265 before the advance might pause. In the longer terms, NZD is expected to continue to advance; it remains to be seen if the y-t-d high of 0.6320 is within reach, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
Bulls may try to test 0.6265
24-HOUR VIEW: “We expected NZD to trade in a range between 0.6180 and 0.6225 yesterday. Our expectation was incorrect. Instead of trading in a range, NZD rose, reaching a high of 0.6254. Despite the relatively sharp advance, upward momentum has not increased much. That said, provided that 0.6215 (minor support is at 0.6230) is not breached, NZD could test 0.6265 before the advance might pause.”
1-3 WEEKS VIEW: “Two days ago (26 Aug, spot at 0.6230), we highlighted that while we continue to expect NZD to advance, conditions are severely overbought, and it remains to be seen if the year-to-date high of 0.6320 is within reach. There is no change in our view. On the downside, should NZD break below 0.6180 (‘strong support’ level previously at 0.6140), it would indicate that NZD is not strengthening further.”
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