Further strength in the New Zealand Dollar (NZD) is not out of the question; it is unclear whether it can break the solid resistance level at 0.5990, note UOB Group FX strategists Quek Ser Leang and Lee Sue Ann.
Bears push towards 0.5890
24-HOUR VIEW: “We detected ‘mild bullish pressure’ yesterday. We stated that ‘NZD’s bias is to the upside, but it remains to be seen whether any advance can break the strong resistance level at 0.5930.’ NZD rose more than expected, easily surpassing 0.5930 upon hitting a high of 0.5961 in late NY trade. Further NZD strength is not ruled out, but this time around, it is unclear whether it can break the strong resistance level at 0.5990. On the downside, support levels are at 0.5935 and 0.5920.”
1-3 WEEK VIEW: “We turned negative on NZD two weeks ago. While tracking the NZD’s decline, we highlighted yesterday (July 31, pair at 0.5900) that ‘NZD weakness is nearing an end.’ Subsequently, NZD broke above our ‘strong resistance’ level of 0.5930, indicating that the weakness is over. The current price action is likely part of a recovery phase. From here, as long as NZD holds above 0.5890 (current ‘strong support’ level), it could rally to 0.5990.”
Source: Fx Street
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