Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group see further rebound could motivate NZD/USD to revisit the 0.6300 zone in the next few weeks.

Key Quotes

24-hour view: “The strong bounce in NZD to 0.6275 and the strong daily at 0.6257 (+1.16%) came as a surprise (we were expecting NZD to trade in a range. The strong rebound has scope to extend but in view of the overbought conditions, a clear break of the major resistance at 0.6300 is unlikely. On the downside, a breach of 0.6215 (minor support is at 0.6235) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We have held a negative NZD view since two weeks ago. Yesterday (01 Mar, spot at 0.6180), we noted that downward momentum has decreased and we indicated that ‘the chance of 0.6100 coming into view has diminished’. NZD subsequently soared above our ‘strong resistance’ level at 0.6225. The breach of the ‘strong resistance’ level indicates that NZD weakness has ended. We view the current price actions as part of a rebound and not the start of a sustained advance. The rebound could extend to 0.6300. All in all, only a breach of 0.6180 (‘strong support’ level) would indicate that NZD is not rebounding further.”