NZD/USD needs to clear the 0.62754 level to allow for a potential move to 0.6315 in the near term, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We did not expect the strong rise in NZD to 0.6263 yesterday (we were expecting NZD to trade in a range). Not surprisingly, the sharp and rapid rise is overbought. However, with no signs of weakness just yet, NZD could test the resistance at 0.6275. Today, the chance of a sustained rise above 0.6275 is not high. On the downside, a breach of 0.6160 (minor support is at 0.6190) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Yesterday (13 Mar, spot at 0.6145), we held the view that NZD ‘appears to have moved into a consolidation phase and it is likely to trade between 0.6085 and 0.6220’. We did not anticipate the strong surge to 0.6263. Upward momentum has improved, albeit not much. NZD has to break clearly above 0.6275 before a sustained advance is likely (the next resistance level is at 0.6315). The likelihood of NZD breaking clearly above 0.6275 will remain intact as long as NZD stays above 0.6145.”