NZD / USD stable above 0.6670 despite strong US dollar

• NZD / USD consolidates gains above 0.6670.
• Kiwi remains stable despite overall USD strength.
• NZD / USD likely to extend rally, targeting 0.6770 / 6806 – Credit Suisse.

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

Kiwi remains strong in risk aversion session

The NZD / USD remains largely unchanged on the daily chart, having hovered within a 30 pip range, with downside attempts contained at 0.6670 and bulls capped below last week’s high of 0.6700.

Strong risk aversion sparked by concerns about the global surge in coronavirus cases has not had a significant impact on the risk-sensitive New Zealand dollar. News of record infections in the United States and France and a new state of emergency in Spain have crushed market sentiment, boosting demand for safe assets.

In this context, the optimistic reports of the Oxford / AstraZeneca vaccine, which has demonstrated a strong immune response in elderly patients, have been largely ignored. The US dollar has appreciated 0.3% on the day, and the major stock indices show significant declines.

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

On the technical front, Credit Suisse’s currency strategy team believes the pair is likely to resume its recent rally: “The NZD / USD closed just above key short-term resistance at 0.6682 / 93 on Friday, although the market is struggling to keep up so far through this break this morning. However, the breakout above here should trigger a small base, which should lead to an acceleration of the bullish momentum and open the door to 0.6737 / 52 below. , then a key set of medium-term resistances at 0.6778 / 6806 – recent and current year highs, as well as the 78.6% retracement of the December 2018 / March 2020 drop. ”