NZD/USD stays neutral in the near term – UOB

FX Strategists at UOB Group suggested the Kiwi Dollar should keep the rangebound theme unchanged in the next weeks.

Key Quotes

24-hour view: “We expected a higher NZD yesterday but held the view that “a break above 0.6825 would come as a surprise”. NZD subsequently surprised us by easily taking out the 0.6825 resistance and hit a high of 0.6834 before ending the day on a firm note. While the rally appears to be running ahead of itself, there is room for a test of last week’s top near 0.6850 but a sustained move above this level seems unlikely. Overall, only a break of 0.6790 would indicate that a short-term top is in place (minor support is at 0.6810)”.

Next 1-3 weeks: “Despite the relatively strong recovery yesterday, NZD does not appear to be ready to embark on a sustained directional move. That said, the improved undertone suggests it has moved into a higher trading range of 0.6740/0.6880 instead of the 0.6710/0.6850 expected previously. Looking further out, a clear break of 0.6880 would greatly increase the odds for a move to 0.6930”.