The current price movements are likely part of a consolidation phase between 0.5935 and 0.5965. In the longer run, New Zealand Dollar (NZD) could break above 0.5990; the scope for further advance may be limited, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Scope for further advance may be limited

24-HOUR VIEW: "While we held the view that 'there is room for NZD to rise further,' last Friday, we pointed out that 'overbought conditions suggest that it is unlikely to be able to break above 0.5990 today.' NZD then rose to a high of 0.5979 and then pulled back to a low of 0.5942. The price movements are likely part of a consolidation phase, expected to be between 0.5935 and 0.5965."

1-3 WEEKS VIEW: "We have been holding a positive NZD stance since early last week (see annotations in the chart below). Tracking the subsequent price movements, we highlighted last Tuesday (09 Sep, spot at 0.5940) that NZD 'is likely to continue to rise, but it remains to be seen if the major resistance at 0.5990 is within reach.' After NZD rose further, we indicated last Friday (12 Sep, spot at 0.5970) that 'while there is a chance for NZD to rise above 0.5990, we believe the scope for further advance may be limited.' We added, 'looking ahead, the next level to watch above 0.5990 is 0.6010.' Our view remains unchanged. On the downside, a breach of 0.5925 (no change in ‘strong support’ level) would indicate that NZD is not rising further."