New Zealand Dollar (NZD) is likely to trade sideways between 0.5560 and 0.5610. In the longer run, upward momentum has largely faded; NZD is expected to trade in a 0.5540/0.5650 range, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
NZD to trade in a 0.5540/0.5650 range
24-HOUR VIEW: "Our view for NZD to 'trade in a sideways range between 0.5580 and 0.5630' last Friday was incorrect, as it dropped to a low of 0.5564 before closing at 0.5585 (-0.41%). The decline did not result in a significant increase in momentum, and instead of continuing to decline, NZD is more likely to trade sideways between 0.5560 and 0.5610."
1-3 WEEKS VIEW: "While we noted 'a slight increase in momentum' last Thursday (15 Jan, spot at 0.5620), we pointed out that it 'must break and remain above 0.5650 before a move to 0.5695 is likely.' We added, 'the likelihood of NZD breaking clearly above 0.5650 will remain intact, provided that it remains above 0.5580 (‘strong support’ level).' Last Friday, NZD fell below 0.5580 (low has been 0.5564). Upward momentum has largely faded, and from here, we expect NZD to trade in a 0.5540/0.5650 range."
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