In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, the current upward bias could encourage NZD/USD to advance to the 0.6475 level in the short term.

Key Quotes

24-hour view: “The outsized surge of 1.84% (NY close of 0.6404) in NZD came as a surprise (we were expecting sideway-trading). The overbought rally could extend to 0.6440. For today, the major resistance at 0.6475 is unlikely to come under threat. Support is at 0.6380 but only a break of 0.6350 would indicate that the current upward pressure has eased.’

Next 1-3 weeks: “We expected NZD to trade sideways between 0.6215 and 0.6350 since late last week. Yesterday (10 Aug), NZD lifted off, cracked 0.6350 and flew to a high of 0.6434. The rapid ascent is accompanied by strong upward momentum and NZD is likely to advance further to 0.6475. Overall, only a break of 0.6320 (‘strong support’ level) would indicate that NZD is not ready to advance to 0.6475.”