New Zealand Dollar (NZD) could edge above 0.5705 before levelling off; the next resistance at 0.5725 is unlikely to come under threat. In the longer run, there has been a tentative buildup in momentum; NZD could rise gradually to 0.5725, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Next resistance at 0.5725 is unlikely to come under threat

24-HOUR VIEW“Although we noted ‘a slight increase in upward momentum’ yesterday, we were of the view that NZD ‘is likely to trade in a higher range of 0.5605/0.5680.’ Instead of trading in a range, NZD rose, reaching a high of 0.5703. Upward momentum has increased further, albeit not much. Today, NZD could edge above 0.5705 before levelling off. The next resistance at 0.5725 is unlikely to come under threat. Support is at 0.5665; a breach of 0.5645 would mean that the current mild upward momentum has eased.”

1-3 WEEKS VIEW: “We highlighted two days ago (04 Feb, spot at 0.5625) that ‘the current price movements appear to be part of a range trading phase, likely between 0.5510 and 0.5705.’ Yesterday, NZD rose to within a couple of pips of 0.5705 (high of 0.5703). There has been a tentative buildup in momentum. From here, NZD could rise gradually to 0.5725. Currently, it is too soon to determine if NZD can break clearly above this resistance level. The upward pressure will remain intact as long as NZD remains above the ‘strong support’ level, currently at 0.5615.”