NZD/USD appears to have entered a 0.5750/0.5790 sideways-trading phase – UOB Group

New Zealand Dollar (NZD) appears to have entered a 0.5750/0.5790 sideways-trading phase. In the longer run, NZD is expected to trade in a range between 0.5730 and 0.5805, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is expected to trade in a range

24-HOUR VIEW: "Yesterday, when NZD was at 0.5780, we held the view that 'there is a chance for NZD to test 0.5800'. However, we highlighted that 'a clear break above this level appears unlikely'. Our view was not wrong, as NZD rose to a high of 0.5801. However, we did not expect NZD to pull back sharply from the high (low was 0.5750). NZD appears to have entered a sideways-trading phase, most likely between 0.5750 and 0.5790."

1-3 WEEKS VIEW: "On Monday (27 Oct, spot at 0.5765), we indicated that 'there has been a slight increase in upward momentum'. However, we pointed out that 'for a continued rise, NZD must first close above 0.5800'. After NZD rose to a high of 0.5789, we highlighted yesterday (29 Oct, spot at 0.5780) that “there is scope for NZD to rise above 0.5800, but it is too early to determine if it can maintain a foothold above this level.” NZD subsequently rose to a high of 0.5801 before pulling back sharply. Although our ‘strong support’ level at 0.5840 has not been breached yet, upward momentum has faded with the pullback. From here, we expect NZD to trade in a range, most likely between 0.5730 and 0.5805."