NZD/USD steady around 0.6500 following a 5% rally this week

• NZD/USD extends its rally to five-month highs above 0.6500.
• The kiwi appreciates 5% through the week boosted by the global risk sentiment.
• Above 0.6488, next targets are 0.6515 and 0.6575 – Credit Suisse.
   

The risk-proxy New Zealand dollar has been one of the best-performing currencies this week. The kiwi has pushed about 5% higher against the dollar this week, accelerating its uptrend from levels near 0.5900 on mid-May to consolidate above 0.6500 for the first time since January.

NZD/USD skyrockets on global recovery hopes

The kiwi is on its course to close a three-week rally, boosted by growing confidence on a quick post-pandemic recovery. The NZD/USD appreciates in parallel to the rally in commodity prices and equity markets, as macroeconomic data starts to suggest that the worst of the COVID-19-induced slowdown has been left behind.

In this backdrop, New Zealand Government’s decision to extend the coronavirus support fund for businesses has been welcomed by the investors and has offered a fresh push to the NZD.

NZD/USD: Above 0.6488, the pair might extend towards 0.6515 and 0.6576 – Credit Suisse

According to the FX analysis team at Credit Suisse, a clear break of 06488 would pave the path towards 0.6515 before 0.6576, “We see resistance at the 78.6% retracement of the 2020 fall at 0.6481/88, ahead of a move back to the 50% retracement of the 2017/2020 fall at 0.6514, where we would expect to see fresh sellers at first. Above here could see momentum accelerate even further with resistance next at the 2014 downtrend at 0.6576, where we would expect to see another effort to cap.”