NZD/USD: Might extend to 0.6070 before a pause - UOB Group

Rally in New Zealand Dollar (NZD) could extend to 0.6070 before a pause can be expected against US Dollar (USD); major resistance at 0.6095 is likely out of reach for now. In the longer run, rapid buildup in upward momentum indicates further NZD strength; the level to monitor is 0.6095, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Rapid buildup in upward momentum indicates further NZD strength

24-HOUR VIEW: "NZD traded in a range of 0.5948/0.5988 last Friday, closing largely unchanged at 0.5971. Yesterday, we stated that 'despite the quiet price action, there has been a slight increase in upward momentum, and this could lead to NZD edging higher to 0.6000 today.' We added, 'a clear break above this level seems unlikely.' We did not expect the sudden surge that sent NZD to a high of 0.6043. NZD then closed higher by 1.13% (0.6039). While deeply overbought, the rally in NZD could extend to 0.6070 before a pause can be expected. The major resistance at 0.6095 is likely out of reach for now. On the downside, 0.6000 (minor support at 0.6020) is likely strong enough to hold any intraday pullback."

1-3 WEEKS VIEW: "In our latest narrative from last Thursday (29 May, spot at 0.5950), we indicated that 'upward momentum has faded, and NZD is likely to trade in a range between 0.5900 and 0.6000 for now.' Yesterday, in a surprise move, NZD jumped above 0.6000 and reached 0.6043 before closing on a strong note at 0.6039 (+1.13%). The rapid buildup in momentum indicates further NZD strength. The level to monitor is 0.6095. We will maintain our view for a stronger NZD as long as 0.5970 is not breached."