NZD/USD could see its upside bias gathering traction in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘while the risk for today is on the downside, any weakness is not expected to challenge last week’s near 0.6630’. Our view for a lower NZD was wrong as it soared and closed on a firm note at 0.6776 (+0.47%). The rapid rise has room to extend but in view of the overbought conditions, the major resistance at 0.6810 is unlikely to come under challenge (there is another resistance at 0.6780). Support is at 0.6745 followed by 0.6725.”

Next 1-3 weeks: “Last Friday (25 Feb, spot at 0.6695), we highlighted that a top is in place and we expected NZD to trade between 0.6630 and 0.6760. Yesterday (28 Feb), NZD gapped down upon opening but subsequently covered the gap as it surged to high of 0.6777 during NY session. Upward momentum is beginning to build and NZD is likely to head higher. That said, 0.6810 is a solid resistance level and may not be easy to break. On the downside, a breach of 0.6690 (‘strong support’ level) would indicate that NZD is not ready to head higher just yet.”