In opinion of UOB Group’s FX Strategists, NZD/USD is forecast to keep trading within the 0.6900-0.7010 range in the next weeks.
24-hour view: “While we expected NZD to weaken yesterday, we were of the view that ‘a break of the major support at 0.6920 is unlikely’. However, NZD dropped briefly to 0.6900 before snapping back up. The sharp rebound appears to be running ahead of itself and is unlikely to extend much further. Overall, NZD is more likely to trade between 0.6930 and 0.6975.”
Next 1-3 weeks: “We have expected NZD to trade within a 0.6920/0.7030 range since last Friday (23 Jul, spot at 0.6975). While NZD dropped below the bottom of our expected range at 0.6920 during NY hours yesterday (low of 0.6900), the decline was short-lived as NZD rebounded strongly. The price actions suggest that NZD is not ready to embark on a sustained directional move just yet. In other words, NZD could continue to range trade, albeit likely within a lower range of 0.6900/0.7010.”