NZD/USD: Upside momentum loses some traction – UOB

It seems the upside bias is beginning to stutter around NZD/USD according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: After NZD rose to a high of 0.6247 and pulled back, we indicated yesterday that “the pullback in overbought conditions suggests NZD is unlikely to rise much further” and we expected it to “trade sideways between 0.6205 and 0.6245.” However, NZD edged to a low of 0.6192. While downward momentum has hardly increased, NZD could continue to edge lower. That said, any decline is unlikely to break below the strong support at 0.6180. Resistance is at 0.6215; if NZD breaks above 0.6230, it would indicate that the current mild downward pressure has eased. 

Next 1-3 weeks: We turned positive in NZD more than a week ago. In our latest narrative from last Thursday (15 Jun, spot at 0.6200), we held the view that NZD “is likely to advance further and the next level to watch is 0.6265.” Yesterday (19 Jun), NZD edged to a low of 0.6192. Upward momentum is beginning to slow and a break of the ‘strong support’ at 0.6180 (no change in level) would suggest 0.6265 is out of reach this time around.