Further upside in NZD/USD should be seen as corrective and unlikely to challenge the resistance at 0.6525, according to FX Strategists at UOB Group.
24-hour view: “The rapid and outsized surge in NZD that hit a high of 0.6487 is running ahead of itself. Severely overbought conditions suggest further NZD strength is unlikely. For today, NZD is more likely to consolidate, expected to be between 0.6415 and 0.6465.”
Next 1-3 weeks: “The weak phase in NZD that started in late January ended abruptly as NZD just surged above the ‘strong resistance’ level of 0.6640 at the time of writing. The low of 0.6378 from yesterday (11 Feb) is deemed as a short-term bottom and NZD is likely to trade above this level, at least for a week or so. That said, any advance is viewed as a correction for now and a break of the solid resistance level at 0.6525 is unlikely (on a shorter-term note, 0.6500 is already strong level).”