NZD/USD: Rejected ahead of 200-DMA, sights on mid-April high at 0.6744/84

• NZD/USD away correcting from 7th April lows and late London highs
• NZD/USD +0.155 on the day.
• Central banks in focus. 

NZD/USD is currently trading at 0.6692, +0.15% on the day, travelling between a range of 0.6603 and 0.6666 so far. The pair has been sent back from the London session highs as the dollar perks up across the board, with the DXY rallying from 96.75 to a current high of 97.29, supported by a recovery in risk appetite and higher U.S. yields with the 10-year yield climbing from a low of 2.075% to 2.136% on the day so far. 

Since the start of this month the value of NZD/USD has risen by around 2.4% to levels above those maintained just ahead of the May 08 rate cut, as analysts at Rabobank noted:

"The better tone of the NZD is largely on the back of the hawkish remarks from Hawkesby, though heightened speculation of Fed rate cuts has weakened the USD in recent sessions.  If maintained the stronger NZD will represent a tightening of monetary conditions and could increase the chances of more dovish rhetoric from the RBNZ at the June 26 policy meeting, if not before."

Meanwhile, the greenback has been subject to the markets tetchiness following uber-dovish rhetoric from James Bullard, a voting FOMC member, who spoke earlier this week calling out the potential need for a rate cut, 'soon'. This was then followed-up by Powell, the Federal Reserve Chairman, speaking yesterday who commented on the outlook and was perceived to be leaving the door open for the same, concerned over the potential for a prolonged trade war with China and subsequent adverse ramifications for both global and US economic growth. 

NZD/USD levels

The Kiwi has been rejected by the 55-day moving average at .6661 and 7th April lows, losing sight of the late January and February lows, as well as the 200-day, moving average at .6708/19. Analysts at Commerzbank note that there is support below the 0.6560 late May high comes in at the May low at .6475 as well as in the 0.6464/24 area. Only unexpected failure there would push the 2016 low at .6347 to the fore. On the upside, and a breakthrough recent resistance and the 200-D MA, the analysts have the March low and the mid-April high at .6744/84 in sight. "There the cross may struggle. If not, we would have to allow for the April high at .6838 to be reached, above which sits key resistance at .6939/70, consisting of the December, February and March highs."