NZD/USD faces some near-term consolidation – UOB

NZD/USD could move into a consolidative phase ahead of the potential resumption of the uptrend, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for NZD to ‘drift lower’ was wrong as it soared to a high of 0.6945. Conditions remain overbought and NZD is unlikely to strengthen beyond 0.6945 from here. Overall, NZD is more likely to consolidate and trade sideways at these higher levels. Expected range for today, 0.6880/0.6930.”

Next 1-3 weeks: “We have held a positive in NZD for about 2 weeks now. In our latest narrative from Tuesday (17 Nov, spot at 0.6905), we indicated that NZD ‘is likely to advance further to 0.6940, possibly as high as 0.6970’. Our expectation was correct as NZD rose to a high of 0.6945 yesterday (18 Nov). Further gains are not ruled out but overbought shorter-term conditions could lead to a couple of days of consolidation first. Only a break of 0.6850 (‘strong support’ previously at 0.6830) would indicate the current NZD strength has run its course.”