Expected to trade sideways between 0.6310 and 0.6365 – UOB Group

The momentum becomes neutral; The New Zealand dollar (NZD) is expected to trade sideways between 0.6310 and 0.6365. In the long term, there was no further increase in momentum; it remains unclear whether the NZD could rise further to 0.6410, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.

It is unclear whether the NZD can rise further to 0.6410

24 HOUR VIEW: “After the NZD rallied sharply last Friday, we indicated yesterday (Monday) that ‘the rapid rally appears to be overdone, but the NZD could test resistance at 0.6370 before the risk of a pullback increases.’ I also indicated that “a sustained break above 0.6370 is unlikely today.” Our view was not wrong, even though the NZD rallied slightly more than expected to 0.6379 before pulling back. Momentum indicators are turning neutral and we expect the NZD to trade sideways today, likely between 0.6310 and 0.6365.”

WEEKS 1-3: “Last Friday (September 27 at 0.6325), I indicated that ‘to continue advancing, the NZD needs to break clear above 0.6355.’ After NZD broke above 0.6355, we indicated yesterday (September 30, spot at 0.6350) that NZD “is likely to rise above 0.6370, but it is not clear at the moment whether there is enough momentum for it to touch the high of last July, near 0.6410”. NZD later rose to 0.6379 before retreating. There was no further momentum building and it remains unclear whether the NZD could rise further to 0.6410. In general, only a breach of 0.6280 (no change to the ‘strong support’ level) would mean that 0.6410 does not appear.”