NZD/USD: Door open to an advance beyond 0.6385 – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang do not rule out NZD/USD surpassing the 0.6385 level in the near term.

Key Quotes

24-hour view: “Yesterday, we held the view that NZD ‘is likely to edge higher but it is unlikely to break above 0.6385’. While our view for a higher NZD was not wrong, instead of edging higher, NZD soared briefly to 0.6381 before easing. Upward momentum has improved, and today, NZD is likely to rise to 0.6385. The next resistance at 0.6420 is unlikely to come under threat. On the downside, a breach of 0.6335 (minor support is at 0.6350) indicates that NZD is not advancing further.”

Next 1-3 weeks: “We have held a positive NZD view since last Wednesday, 03 May, when NZD was trading at 0.6215. In our most recent narrative from Tuesday (09 May, spot at 0.6335), we highlighted that as long as 0.6265 is not breached, there is scope for NZD to rise to 0.6385. In NY trade yesterday, NZD soared to a high of 0.6381. The increase in upward momentum suggests that a break of 0.6385 will not be surprising. The next level to watch is 0.6420. Overall, we continue to hold a positive NZD view as long as the ‘strong support’ at 0.6300 (level was previously at 0.6265) is not breached.”