Scope for New Zealand Dollar (NZD) to rise further, but it is unlikely to reach 0.5790 today. In the longer run, boost in momentum suggests the major resistance at 0.5790 is back in sight, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Major resistance at 0.5790 is back in sight

24-HOUR VIEW: "Following NZD choppy price action two days ago, we indicated yesterday that 'the outlook is mixed.' We expected NZD to 'trade in a 0.5675/0.5725 range.' However, NZD soared to 0.5767, closing sharply higher by 1.02% at 0.5763. The sharp and swift rise appears overdone, and while there is scope for NZD to rise further, it is unlikely to reach 0.5790 today. Support is at 0.5745; a breach of 0.5730 would indicate that the current strong upward pressure has eased."

1-3 WEEKS VIEW: "We turned positive in NZD on Monday (17 Feb, spot at 0.5730), indicating that 'the price action suggests further NZD strength, potentially to 0.5790.' Yesterday (20 Feb, spot at 0.5700), we noted that 'upward momentum has slowed, and a breach of 0.5675 (‘strong support’ level) would indicate 0.5790 is not coming into view.' NZD subsequently soared to 0.5767. The slowing momentum received a boost, and the major resistance at 0.5790 is back in sight. On the downside, the ‘strong support’ level has moved higher to 0.5715 from 0.5675."