24-hour view: “We expected a higher NZD yesterday but did not anticipate a break above last week’s 0.7304 top. NZD managed to move above this level to touch 0.7311 before ending the day just below the high. Upward momentum has improved considerably and further gains would not be surprising. However, last month’s top at 0.7355 is a major resistance and for today, a clear break of this level seems unlikely (minor resistance is at 0.7330). On the downside, 0.7270 is expected to be strong enough to hold any intraday pull-back (minor support is at 0.7290)”.
Next 1-3 weeks: “NZD rose strongly and moved above the top of our previously expected 0.7150/0.7305 consolidation range (overnight high of 0.7311). Despite the strong rise, we are not convinced that the current price action is the start of a bullish phase. That said, the immediate pressure has shifted to the upside and a move above last month’s 0.7355 top would not be surprising. At this stage, the prospect for further extension to the year-to-date high of 0.7437 is deemed as low (0.7400 is already a rather strong resistance). Overall, we expect NZD to stay underpinned from here as long as the key short-term support at 0.7240 is intact”.
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