Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group see NZD/USD navigating within the 0.6135-06285 range in the next few weeks.

Key Quotes

24-hour view: We expected NZD to consolidate in a range of 0.6130/0.6190 yesterday. Instead of consolidating, NZD soared to a high of 0.6226. While the rapid advance appears to be overdone, NZD could test 0.6240 before pulling back. The major resistance at 0.6285 is not expected to come under threat. Support is at 0.6185; if NZD breaks below 0.6165, it would indicate that the current upward pressure has eased. 

Next 1-3 weeks: After NZD dropped to 0.6121 last Friday and then rebounded strongly, we indicated yesterday that “while the risk for NZD remains on the downside, it has to break and stay below 0.6120 before further weakness is likely.” We added, “The likelihood of NZD breaking clearly below 0.6120 will remain intact as long as it stays below 0.6220.” In NY trade, NZD soared and broke above 0.6220 (high was 0.6226). Downward pressure has eased, and for the time being, NZD is likely to trade in a range of 0.6135/0.6285