NZD/USD: Likely to consolidate between 0.5760 and 0.5790 – UOB Group

New Zealand Dollar (NZD) is likely to consolidate between 0.5760 and 0.5790. In the longer run, the probability of further NZD gains above 0.5800 is diminishing, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Probability of further NZD gains above 0.5800 is diminishing

24-HOUR VIEW: "Yesterday, we expected NZD to 'consolidate between 0.5755 and 0.5785'. However, NZD traded in a higher range of 0.5769/0.5795 before closing largely unchanged (+0.05%). There has been no increase in either downward or upward momentum, and we continue to expect NZD to consolidate today, most likely between 0.5760 and 0.5790."

1-3 WEEKS VIEW: "We have expected a higher NZD since late last month (see annotations in the chart below). In our most recent narrative from last Thursday (05 Dec, spot at 0.5760), we stated that 'the price action continues to suggest a higher NZD'. We pointed out that 'the levels to watch are 0.5800 and 0.5835'. Although NZD eked out a fresh high of 0.5795 yesterday, there has been no further increase in upward momentum. This, combined with overbought conditions, suggests the probability of further NZD gains above 0.5800 is diminishing. Conversely, a breach of 0.5750 (‘strong support’ level previously at 0.5735) would indicate that NZD is not rising further."