NZD/USD could extend the upside bias once 0.6365 is cleared, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
24-hour view: “We expected NZD to ‘trade within a range of 0.6240/0.6320’ yesterday. However, NZD rose to a high of 0.6352 before closing on a firm note at 0.6332 (+0.66%). Further NZD strength is not ruled but as upward momentum is not exactly strong, a break of 0.6365 is unlikely. Support is at 0.6310 followed by 0.6290.”
Next 1-3 weeks: “Yesterday (01 Aug, spot at 0.6290), we shifted from a positive to neutral view on NZD and expected it to trade between 0.6210/0.6340. We did not expect the rapid manner by which NZD rose above 0.6340 (high of 0.6352). Shorter-term upward momentum has improved somewhat but NZD has to break 0.6365 first before further advance is likely. The chance for NZD to break 0.6365 would remain intact as long as it does not move below 0.6260 within these couple of days. Looking ahead, the next resistance above 0.6365 is at 0.6395.”