Extra gains in NZD/USD are likely although there is a strong hurdle around 0.6875, suggested FX Strategists at UOB Group. The strong surge in NZD has gathered momentum and it could test the major resistance at 0.6875. In view of the overbought conditions, a clear break of this level is unlikely.
The next resistance is at 0.6900. O the downside, a breach of 0.6795 (minor support is at 0.6815) would indicate that the current upward pressure has eased.
NZD soared yesterday and easily took out our ‘strong resistance’ level at 0.6810 (high of 0.6845). The break of 0.6810 indicates that our view for NZD to trade with a downward bias was incorrect. The rapid build-up in momentum has shifted the risk to the upside. That said, any advance is expected to face solid resistance at 0.6875. On the downside, a breach of 0.6765 would indicate that the current upward pressure has eased.