24-hour view: On Tuesday, NZD jumped to a high of 0.6013. Yesterday (Wednesday), when NZD was trading at 0.6000, we indicated that “there is scope for NZD to rise further.” We also indicated that NZD “is unlikely to break clearly above 0.6055.” Our view turned out to be correct as NZD rose to 0.6055 before easing off to end the day at 0.6023 (+0.25%). Upward pressure has eased somewhat, and NZD is unlikely to rise further. Today, NZD is more likely to trade in a sideways range of 0.5980/0.6045. 

Next 1-3 weeks: Our update from yesterday (15 Nov, spot at 0.6000) still stands. As highlighted, while we expect NZD to strengthen further, it has to break clearly above 0.6055 before an advance to 0.6100 is likely. Note that NZD rose briefly to 0.6055 in NY trade before pulling back. The chance of NZD breaking clearly above 0.6055 will remain intact as long as it stays above 0.5920 (‘strong support’ level was at 0.5900 yesterday).