NZD/USD: Likely to consolidate between 0.5895 and 0.594 - UOB Group

New Zealand Dollar (NZD) is likely to consolidate between 0.5895 and 0.5945. In the longer run, price action indicates NZD is likely to continue to rise, but it remains to be seen if the major resistance at 0.5990 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to continue to rise

24-HOUR VIEW: "Following the sharp rise in NZD that reached a high of 0.5943 two days ago, we highlighted the following yesterday: 'Strong momentum indicates further NZD strength, but overbought conditions may limit gains to a test of 0.5960. The significant resistance level at 0.5990 is unlikely to come into view today. Support is at 0.5925; a breach of 0.5910 would indicate that NZD is not strengthening further.' Our assessments turned out to be correct, as NZD rose to a high of 0.5960, dropped back down to a low of 0.5923, before closing at 0.5925 (-0.27%). NZD appears to have entered a consolidation phase. Today, we expect NZD to trade in a range between 0.5895 and 0.5945."

1-3 WEEKS VIEW: "Two days ago (08 Sep, spot at 0.5855), we indicated that 'for a continued rise, NZD must first close above 0.5930.' After NZD rose and closed at 0.5941, we stated yesterday that 'the price action indicates NZD is likely to continue to rise, but it remains to be seen if there is sufficient momentum for it to reach the major resistance at 0.5990.' NZD subsequently rose to a high of 0.5960 and then retreated. We will continue to hold the same view for now, as long as the 'strong support' at 0.5880 (no change in level) holds."