There is room for New Zealand Dollar (NZD) to rise further, but it is unlikely to be able to break above 0.5990 today. In the longer run, 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: "Although NZD rose to a high of 0.5964 two days ago, we indicated yesterday that 'there has been no clear increase in upward momentum, and NZD is unlikely to rise much further.' We expected NZD to “trade sideways between 0.5925 and 0.5965.” Our assessment was incorrect, as NZD fell to a low of 0.5915 before staging a sharp and swift rise that reached a high of 0.5979. There is room for NZD to rise further, but overbought conditions suggest that it is unlikely to be able to break above 0.5990 today. To keep the overbought momentum going, NZD must hold above 0.5945, with minor support at 0.5960."

1-3 WEEKS VIEW: "In our latest narrative from Tuesday (09 Sep, spot at 0.5940), we indicated that 'the price action indicates NZD is likely to continue to rise, but it remains to be seen if there is sufficient momentum for it to reach the major resistance at 0.5990.' Yesterday, NZD rose to a high of 0.5979. While there is a chance for NZD to rise above 0.5990, we believe the scope for further advance may be limited. Looking ahead, the next level to watch above 0.5990 is 0.6010. Overall, only a breach of 0.5925 (‘strong support’ level previously at 0.5895) would indicate that NZD is not rising further."