NZD/USD stretches up to multi-month highs at 0.6478

• NZD/USD four-day rally from 0.6185 extends to four-month highs at 0.6478.
• The pair pulls back to 0.6445 area with the US picking up.
• Above 0.6488, the NZD could reach 0.6515 and 0.6576 – Credit Suisse.

The New Zealand dollar has extended its rally against the USD for the fourth consecutive day to hit fresh four-month highs at 0.6478 before pulling back below March’s high at 0.6447 with the US dollar trimming losses.

NZD spikes higher with the US dollar losing ground

The kiwi appreciated above the 0.6447 level on early US session with the US dollar losing its footing after the European Central Bank announced a larger than expected increase on its COVID-19 stimulus package. The ECB offered a fresh push to the previous day's risk sentiment, sending the US dollar to session lows.

The uptrend, however, seems to have lacked follow-through, as the pair retreated to the mid-range of 0.6400, shortly afterwards. The greenback is picking up with the risk sentiment losing steam and US equity markets turning into negative territory.

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 0.6488 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.”

NZD/USD key levels to watch