There is a chance for New Zealand Dollar (NZD) to test 0.5840 before the risk of a pullback increases. In the longer run, NZD has likely moved into a 0.5770/0.5865 range-trading phase, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to trade in a range for now

24-HOUR VIEW: "We did not anticipate the sharp rise in NZD that reached a high of 0.5831 (we were expecting consolidation). Despite the relatively sharp advance, upward momentum has not increased significantly. That said, there is a chance for NZD to test 0.5840 before the risk of a pullback increases. We do not expect the major resistance at 0.5865 to come under threat. Support is at 0.5805; a breach of 0.5790 would indicate that the current upward bias has faded."

1-3 WEEKS VIEW: "We have held a negative stance on NZD since the middle of last month (as annotated in the chart below). Yesterday (01 Oct, spot at 0.5795), we indicated that 'downward momentum has slowed further, and unless there is a meaningful decline soon, a break above 0.5815 would suggest that NZD has moved into a range-trading phase.' NZD subsequently rose above 0.5815, reaching a high of 0.5831. The price action suggests that NZD is likely to trade in a range for now, expected to be between 0.5770 and 0.5865."