In the opinion of Quek Ser Leang, Market Strategist at UOB Group, and Lee Sue Ann, Economist, the NZD/USD pair needs to surpass 0.6055 to allow further gains in the short term.
24-hour outlook: On Tuesday, NZD/USD jumped to a high of 0.6013. Yesterday, Wednesday, when NZD/USD was trading at 0.6000, we indicated that “there is room for NZD/USD to continue rising.” We also noted that “NZD/USD is unlikely to break clearly above 0.6055.” Our view turned out to be correct, as NZD/USD rose as high as 0.6055 before easing to end the day at 0.6023 (+0.25%). Bullish pressure has eased somewhat and NZD/USD is unlikely to continue rising. Today, NZD/USD is most likely to trade in a sideways range of 0.5980/0.6045.
Next 1-3 weeks: Our update from yesterday (November 15, NZD/USD at 0.6000) still stands. As we have highlighted, while we expect NZD/USD to continue strengthening, it needs to clearly break above 0.6055 before a rally to 0.6100 is likely. Note that NZD/USD briefly rose to 0.6055 during the American session before pulling back. The possibility of NZD/USD breaking clearly above 0.6055 will remain intact as long as it remains above 0.5920 (the “strong support” level was at 0.5900 yesterday).
Source: Fx Street
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