NZD/USD could have likely moved into a 0.6740-0.6845 consolidative range, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday we held the view that NZD is ‘unlikely to strengthen much further’ and we expected it to ‘trade sideways between 0.6785 and 0.6835’. NZD subsequently rose to 0.6836 before dropping quickly to 0.6791 during NY session. The decline has room to extend but in view of the lackluster momentum, a break of 0.6765 is unlikely (next support is at 0.6740). On the upside, a breach of 0.6825 (minor resistance is at 0.6810) would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “We continue to hold the same view as Tuesday (04 Jan, spot at 0.6790). As highlighted, NZD has likely moved into a consolidation phase and could trade within a 0.6740/0.6845 range. Looking ahead, a clear break of 0.6845 would indicate that NZD is ready to head higher towards 0.6885.”