Further New Zealand Dollar (NZD) strength vs US Dollar (USD) is not ruled out; any further advance is likely part of a higher 0.5785/0.5845 range. In the longer run, rapid buildup in momentum continues to suggest NZD strength; the level to watch is 0.5870, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
The level to watch is 0.5870
24-HOUR VIEW: “NZD rose to a high of 0.5755 last Friday. Yesterday, Monday, we noted that ‘The increase in momentum suggests there is potential for NZD to continue to advance.’ We also noted that ‘it is unclear for now whether NZD can break and remain above the 0.5765/0.5775 resistance zone.’ We did not quite expect the rapid upward acceleration as NZD soared above the resistance zone and reached 0.5826. While further NZD strength is not ruled out, any advance is likely part of a higher 0.5785/0.5845 range. In other words, NZD is unlikely to break clearly above 0.5845 today.”
1-3 WEEKS VIEW: “Yesterday (17 Mar), when NZD was at 0.5750, we indicated that ‘upward momentum is building again, but NZD must break and remain above the 0.5765/0.5775 resistance zone before a sustained rise is likely.’ We did not expect the sudden jump that sent NZD soaring to a high of 0.5826. The rapid buildup in momentum continues to suggest NZD strength. The level to watch on the upside is 0.5870. On the downside, the ‘strong support’ level has moved higher to 0.5740 from 0.5695.”