NZD/USD steady above 0.6670 despite US dollar strength

• NZD/USD consolidates gains above 0.6670.
• The kiwi remains steady despite the overall USD strength.
• NZD/USD, likely to extend rally, aiming to 0.6770/6806 – Credit Suisse.

New Zealand dollar is consolidating gains near 0.6700 on Monday after the three-day rally from 0.6550 performed last week.

The kiwi remains strong in a risk-of session

NZD/USD is practically unchanged on the daily chart, after having been oscillating within a 30-pip range, with downside attempts contained at 0.6670 and bulls capped below last week’s high at 0.6700.

The strong risk aversion triggered by concerns about the global increase of coronavirus cases has failed to make a significant impact on the risk-sensitive New Zealand dollar. News about record infections in the US and France and a new state of emergency in Spain have crushed market mood, boosting demand from safe assets.

Against this backdrop, the upbeat reports from Oxford/AstraZeneca vaccine, which has shown a strong immune response on elderly patients has been practically ignored. The US dollar has appreciated 0.3% on the day, with the main equity indexes showing significant declines.  

NZD/USD: upside risks reinforced with medium-term resistance at 0.67770/6806 – Credit Suisse

On the technical front, the FX streategy team at Credit Suisse sees the pair likely to resume its recent rally: “NZD/USD closed just above key short-term resistance at 0.6682/93 on Friday, although the market is struggling to so far follow through on this break this morning. Nevertheless, the break above here should trigger a small base, which should lead to an acceleration of upside momentum and open the door to 0.6737/52 next, then a key cluster of medium-term resistances at 0.6778/6806 – the recent and current year highs as well as the 78.6% retracement of the December 2018/March 2020 fall.”