Extra upside could motivate NZD/USD to retest the 0.6260 region in the short-term horizon, note Economist Lee Sue Ann and Markets Strategist Quek ser Leang at UOB Group.
Key Quotes
24-hour view: The strong surge in NZD that sent it to a high of 0.6236 in NY trade came as a surprise (we were expecting it to trade sideways). The sharp and swift rise appears to be overdone and NZD is unlikely to advance much further. Today, NZD is more likely to trade in a range of 0.6150/0.6230.
Next 1-3 Weeks: Yesterday (June 14, spot at 0.6155), we highlighted that “NZD has room to strengthen further although it needs a clear break above 0.6180 before a more sustained advance is likely”. We added, “Looking ahead, 0.6230 is a tough resistance and NZD may find it difficult to break this level”. We did not anticipate the way NZD rose to a high of 0.6236 in NY trade. NZD is likely to go further. The next level to watch is 0.6265. On the downside, a breach of 0.6125 (the ‘strong support’ level was at 0.6100 yesterday) would indicate that the NZD strength that started earlier this week has run its course.
