The New Zealand Dollar (NZD) is likely to consolidate between 0.5760 and 0.5790. In the longer term, the likelihood of further gains for the New Zealand dollar above 0.5800 is diminishing, UOB Group FX analysts Kwek Ser Liang and Peter Chia noted.
The potential for further NZD gains diminishes above 0.5800
24-hour view: “Yesterday we expected the New Zealand dollar to strengthen between 0.5755 and 0.5785.” However, the New Zealand dollar traded in a higher range at 0.5769/0.5795 before closing largely unchanged (+0.05%). There has been no increase in bearish or bullish momentum, and we continue to expect the New Zealand dollar to strengthen today, likely between 0.5760 and 0.5790.”
1-3 week view: “We have been forecasting a higher NZD since late last month (see annotations in chart below). In our latest report from last Thursday (05 Dec, spot at 0.5760), we stated that “price action continues to point to a higher NZD”. We noted that “levels to watch are 0.5800 and 0.5835”. 0.5795 Yesterday, there was no further increase in bullish momentum, this, combined with overbought conditions, suggests that the potential for further NZD gains above 0.5800 is diminishing. Conversely, a break of the 0.5750 level (formerly ‘strong support’ level at 0.5735) would indicate that the NZD does not rise further.”
