FX Strategists at UOB Group Quek Ser Leang and Peter Chia noted there is scope for NZD/USD to advance to the area above the 0.6500 mark in the short term.

Key Quotes

24-hour view: “We highlighted yesterday that NZD ‘could advance further to 0.6475’. We added, ‘the major resistance at 0.6505 is likely out of reach’. Our view turned out to be correct as NZD rose to 0.6490 before pulling back. The pullback from the high has scope to extend but is unlikely to break the break the support at 0.6400 (minor support is at 0.6420). Resistance is at 0.6465 followed by 0.6485.”

Next 1-3 weeks: “Yesterday (23 May, spot at 0.6445), we highlighted further NZD strength appears likely. We indicated that resistance levels are at 0.6475 and 0.6505. NZD subsequently breached 0.6475 and rose to a high of 0.6490. While overbought shorter-term conditions could lead to a couple of days of consolidation first, as long as 0.6360 (no change in ‘strong support’ level from yesterday) is not breached, there is room for NZD to push higher to 0.6505.”