Outlook for NZD/USD remains positive – UOB

According to FX Strategists at UOB Group, NZD/USD still faces extra gains in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that NZD ‘could break the major resistance at 0.7220 but the next resistance at 0.7245 is not expected to come under threat’. Our view was not wrong even though the advance in NZD came close to taking out 0.7245 (high of 0.7243). The rapid rise appears to be overdone and NZD is unlikely to strengthen much further. That said, it is too soon to expect a pullback. For today, NZD is more likely to consolidate and trade between 0.7200 and 0.7250.”

Next 1-3 weeks: “Yesterday (26 Apr, spot at 0.7195), we highlighted that ‘a daily closing above 0.7220 would indicate that NZD could move to 0.7240, possibly 0.7270’. NZD subsequently soared to 0.7243 before closing on a strong note at 0.7236 (+0.57%). Upward momentum has improved and NZD is likely to strengthen further but overstretched shorter-term conditions suggest 0.7270 may not come into the picture so soon. Overall, the outlook for NZD is deemed as positive as long as it does not move below 0.7165 (‘strong support’ level).”