NZD/USD: Downside pressure alleviated above 0.6255 – UOB

A move above 0.6255 should mitigate the selling bias in NZD/USD in the short term, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes
24-hour view: Yesterday, we expected NZD to trade in a range between 0.6185 and 0.6235. Our view was not wrong, as NZD traded close to our expected range (0.6184/0.6235). The price actions appear to be consolidative, and we continue to expect NZD to trade in a range of 0.6185/0.6235.

Next 1-3 weeks: On Monday (24 Jul, spot at 0.6175), we highlighted that improved downward momentum is likely to lead to NZD weakness to 0.6125. Since then, NZD has not been able to make any headway on the downside. Downward pressure is beginning to wane. However, only a breach of 0.6255 (no change in ‘strong resistance’ level) would suggest NZD is not weakening further.