In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, extra gains in NZD/USD appears on the cards in the near term. We highlighted yesterday that NZD ‘is likely to trade sideways between 0.6340 and 0.6415’. However, NZD rose to a high of 0.6426, dropped to 0.6363 before closing little changed at 0.6382 (-0.05%). Upward momentum has improved a tad and NZD could test 0.6430 first before the risk of a more sustained pullback increases.
The major resistance at 0.6470 is not expected to come into view. Support is at 0.6370, followed by 0.6350.
Last Friday (13 Jan, spot at 0.6390), we highlighted that while the bias for NZD is on the upside, lackluster momentum suggests the chance of a break of the major resistance at 0.6475 is not high. Yesterday, NZD rose to a high of 0.6426 before pulling back. There is no significant improvement in momentum and we continue to hold the same view. Overall, only a breach of 0.6325 (‘strong support’ level previously at 0.6305) would indicate that the upward bias has faded.