UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia note NZD/USD could now head towards the 0.6365 region in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that NZD could test 0.6210. We added, ‘the major support at 0.6180 is unlikely to come under threat’. While NZD dipped 0.6205 in Asian trade, it reversed strongly from the low and soared to 0.6300. The rapid improvement in momentum is likely to lead to further NZD strength. However, overbought conditions suggest the major resistance at 0.6355 is unlikely to come into view today (there is another resistance at 0.6320). On the downside, a breach of 0.6255 (minor support is at 0.6275), would indicate that the current upward pressure has faded.”

Next 1-3 weeks: “Yesterday (03 Apr, spot at 0.6230), we held the view that NZD ‘is not ready to head higher in a sustained manner’ and we expected it to trade between 0.6170 and 0.6295. We did not anticipate the sharp rise to 0.6300. Upward momentum is building again and NZD is likely to head higher to 0.6365. Overall, only a break of the ‘strong support’ level, currently at 0.6230 would indicate that the build-up in momentum has fizzled out.”