Extra gains in NZD/USD are likely although there is a strong hurdle around 0.6875, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The strong surge in NZD has gathered momentum and it could test the major resistance at 0.6875. In view of the overbought conditions, a clear break of this level is unlikely. The next resistance is at 0.6900. O the downside, a breach of 0.6795 (minor support is at 0.6815) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “NZD soared yesterday and easily took out our ‘strong resistance’ level at 0.6810 (high of 0.6845). The break of 0.6810 indicates that our view for NZD to trade with a downward bias was incorrect. The rapid build-up in momentum has shifted the risk to the upside. That said, any advance is expected to face solid resistance at 0.6875. On the downside, a breach of 0.6765 would indicate that the current upward pressure has eased.”