NZD/USD: Dwindling bets for a potential test of 0.6540 – UOB

A probable move to the 0.6540 region in NZD/USD seems to have lost some traction as of late, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our expectations for NZD to ‘trade sideways within a range of 0.6420/0.6480’ were incorrect as it popped to a high of 0.6514 before easing off. Despite the advance, upward momentum has not improved by much. For today, NZD is likely to consolidate and trade within a range of 0.6435/0.6515.”

Next 1-3 weeks: “We have expected a stronger NZD since the start of the week. In our latest narrative from Tuesday (24 May, spot at 0.6445), we highlighted that overbought shorter-term conditions could lead to consolidation first but there is room for NZD to push higher to 0.6505. Yesterday (25 May), NZD popped above 0.6514 before retreating. Upward momentum has improved, albeit not by much. There is room still for NZD to strengthen but the prospect for an advance towards the next major resistance at 0.6540 is not high. On the downside, a break of 0.6420 (‘strong support’ level was at 0.6400 yesterday) would indicate that the current upward pressure has eased.”