Downside limited in NZD – UOB

The Global Economics & Market Research at UOB Group sees the upside momentum in the Kiwi dollar remains underpinned while above 0.7170.

Key Quotes

“Despite the cut, NZD/USD raced higher following the RBNZ monetary policy announcement, to as high as 0.7341. This is the highest level since May 2015”.

“A 25bps cut was overwhelmingly priced in ahead of the announcement, and this meant that the risk was skewed to the upside for the currency, especially when the RBNZ disappointed those who were expecting a more aggressive easing stance from the bank”.

“While the rally in the NZD/USD is clearly overbought, there are no signs of weakness just yet and the current up move appears to have room to extend further towards 0.7390 (next resistance is at 0.7460). In order to maintain the current bullish momentum, any pull-back should not move back below the key support at 0.7170. From a shorter-term perspective, 0.7250 is already a strong support”.