Two-week weakness has ended. The New Zealand Dollar (NZD) is likely to trade in a sideways range of 0.5915/0.5955, or, alternatively, the current recovery phase could extend to 0.5990, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.  

Closest resistance is at 0.5955

24-HOUR VIEW: “While we expected further NZD strength yesterday, we indicated that ‘it is unclear if it can break the solid resistance level at 0.5990.’ NZD subsequently rose briefly to 0.5985 before pulling back to close largely unchanged at 0.5951 (-0.01%). The pullback in overbought conditions and slowing momentum suggests the upside risk has faded for now. Today, NZD is likely to trade sideways, probably in a range of 0.5915/0.5955.”

1-3 WEEKS VIEW: “We indicated yesterday (01 Aug, spot at 0.5950) that the recent two-week NZD weakness has ended. We also indicated that ‘the current recovery phase could extend to 0.5990.’ We continue to hold the same view. Note that NZD rose to 0.5985 in NY trade before pulling back. Overall, only a breach of 0.5890 (no change in ‘strong support’ level) would suggest that 0.5990 is out of reach.”