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NZD/USD closed above the top of its recent range at 0.6682 on Friday, which should trigger a short-term base to open up a move back to medium-term resistances at 0.6791/6806, according to the Credit Suisse analyst team.

Key quotes

“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. 

“A break above 0.6806 would complete a major medium-term base to open up significantly higher levels, with 0.6860 just the next initial resistance.” 

“Short-term support stays at 0.6632, which now ideally holds to maintain the upside pressure. Below would negate the base and suggest a retest of the key 0.6553/47 lows, below which would sharply increase the risk of a deeper setback again.”