NZD/USD is expected to extend the upside on a breakout of the 0.6250 level, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: Yesterday, we held the view that “the overbought NZD strength is likely to extend but is unlikely to threaten last month’s high near 0.6250.” Our expectation did not materialize as NZD traded in a range of 0.6178/0.6206. The current price actions are likely part of a consolidation phase. Today, we expect NZD to trade in a range between 0.6155 and 0.6200. 

Next 1-3 weeks: Yesterday (05 Jul, spot at 0.6190), we highlighted that “upward momentum is beginning to build, but NZD has to break and stay above last month’s high near 0.6250 before further advance is likely.” There is no change in our view. The chance of NZD breaking clearly above 0.6250 will remain intact as long as it stays above 0.6125 in the next few days.