Following the recent price action, extra gains in NZD/USD seems to have lost momentum for the time being, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘strong momentum suggests further NZD strength even though the major resistance at 0.6975 is likely out of reach’.  Our expectations did not materialize as NZD pulled back sharply from 0.6926 (low has been 0.6822). The rapid pullback appears to be running ahead of itself and NZD is unlikely to weaken much further. For today, NZD is more likely to trade sideways between 0.6800 and 0.6880.”

Next 1-3 weeks: “In our latest narrative from yesterday (07 Mar, spot at 0.6885), we highlighted that NZD ‘could advance further to 0.6940, as high as 0.6975’. NZD subsequently rose to 0.6926 before pulling back sharply (low has been 0.6822). The sharp pullback has diminished the odds for further NZD strength. However, only a breach 0.6800 (no change in ‘strong support’ level) would indicate that the upward pressure that started early last week has dissipated.”