Further New Zealand Dollar (NZD) strength is not ruled out; it is unclear if it can break the solid resistance level at 0.5990, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

Bears push towards 0.5890

24-HOUR VIEW: “We detected a ‘mild upward pressure’ yesterday. We indicated that ‘the bias for NZD is tilted to the upside, but it remains to be seen if any advance can break the strong resistance level at 0.5930.’ NZD rose more than expected, easily taking out 0.5930 as it reached a high of 0.5961 in late NY trade. Further NZD strength is not ruled out, but this time around, it is unclear if it can break the solid resistance level at 0.5990. On the downside, support levels are at 0.5935 and 0.5920.”

1-3 WEEKS VIEW: “We turned negative in NZD two weeks ago. As we tracked the decline in NZD, we highlighted yesterday (31 Jul, spot at 0.5900) that ‘the weakness in NZD is close to an end.’ NZD subsequently broke above our ‘strong resistance’ level of 0.5930, indicating that the weakness has ended. The current price action is likely part of a recovery phase. From here, provided that NZD remain above 0.5890 (current level of ‘strong support’ level), it could recover to 0.5990.”