Extra upside in NZD/USD could challenge 0.66 – UOB

FX Strategists at UOB Group believe the strong momentum in the Kiwi Dollar remains well in place and could push NZD/USD to the 0.66 neighbourhood, a key hurdle.

• "24-hour view: NZD traded between 0.6504 and 0.6542 yesterday, close to our expected range of 0.6500/0.6540. Upward momentum has picked up with the firm opening this morning and the bias from here is for NZD to move towards 0.6560. A rise above this level would not be surprising but the next resistance at 0.6580 is likely out of reach. On the downside, the low near 0.6505 is not expected to come into the picture today (minor support at 0.6520).
• Next 1-3 weeks: The price action over the past couple of days is in line with our expectation from Tuesday (03 Dec, spot at 0.6500) wherein we held the view NZD ‘could advance towards 0.6560’. NZD touched 0.6542 yesterday and opened on a firm note this morning. In other words, NZD is still strong and if it were to break above 0.6560, it would shift the focus towards the weekly declining trend line at 0.6600. The relatively long-term trend line is a formidable resistance and may not be easy to crack. The current positive outlook for NZD is deemed as intact unless the 0.6480 ‘strong support’ is breached (level was previously at 0.6460). On a shorter-term note, 0.6505 is already a strong support level.”