Likely to rise above 0.6370 – UOB Group

The New Zealand dollar (NZD) could test resistance at 0.6370 before the risk of a pullback increases; a sustained break above this level is unlikely. Longer term, NZD is likely to rise above 0.6370; it is unclear whether there is enough momentum for it to reach 0.6410, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.

I can try to test the resistance at 0.6370

24-HOUR VIEW: “Our view of the NZD to ‘continue to rise’ last Friday was correct, but we did not expect it to go above 0.6355 (the high was 0.6367). The rapid rally appears to be overdone, but NZD could test resistance at 0.6370 before the risk of a pullback increases. A sustained break above 0.6370 is unlikely today. To maintain momentum, NZD needs to stay above 0.6305 with minor support at 0.6325.”

WEEKS 1-3: “We went neutral on the NZD last Thursday (26 September, 0.6260), indicating that ‘0.6200 to 0.6340 is likely to trade’. After the NZD rallied and approached 0.6340, I indicated on Friday (27 September, spot at 0.6325) that “despite the advance, the upside momentum has not picked up much and to continue advancing, the NZD needs to clearly exceed 0.6355”. NZD later rose to 0.6367 in NY trade. From here, we expect the NZD to rise above 0.6370, but it is unclear at the moment whether there is enough momentum for it to reach last July’s high near 0.6410. To maintain momentum, NZD must not fall below 0.6280 (the ‘strong support’ level was at 0.6240 last Friday).”