There is scope for New Zealand Dollar (NZD) to test 0.5800 before the risk of a pullback increases. In the longer run, the price action continues to suggest a higher NZD; the levels to watch are 0.5800 and 0.5835, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action continues to suggest a higher NZD

24-HOUR VIEW: "We expected NZD to 'trade between 0.5745 and 0.5775' last Friday. However, NZD rose to a high of 0.5787. Despite advancing, NZD has not gained much momentum. That said, there is scope for NZD to test 0.5800 before the risk of a pullback increases. On the downside, support levels are at 0.5765 and 0.5755."

1-3 WEEKS VIEW: "We have expected a higher NZD since late last month. In our most recent narrative from last Thursday (05 Dec, spot at 0.5760), we stated that 'the price action continues to suggest a higher NZD'. We pointed out that 'the levels to watch are 0.5800 and 0.5835'. We will maintain the same view as long as 0.5735 (‘strong support’ level was previously at 0.5725) is not breached."