The pair is hovering near the 0.7100 level awaiting the next move
I highlighted here yesterday that the 50.0 retracement level and the 200-day MA level (both now at 0.7107) will be the area that takes centre stage for the pair - if it were to try and break to the upside. US trading failed to see the pair go higher and it closed yesterday around the 0.7100 region.
In Asian trading today, the pair fell lower but losses were capped by the December upward trendline on the hourly chart:
Buyers are still holding on and are looking to give the resistance levels pointed out another go. There's also the 100-hour MA that sits at 0.7093 - but the bigger resistance points are the 50.0 retracement level and the 200-day MA on the daily chart in my view.
That remains the key levels to take out for the pair to break higher. The thing that's working against the kiwi right now though is that AUD/NZD is looking to break higher as it's trading above the 100-day MA - which has been a stubborn resistance point for the pair that I have pointed out since last week.
Yield spreads between 10-year Australia and New Zealand yields have fallen to as low as 5 bps in recent days (still in favour of NZ), and by right that should be helping the case for a higher AUD/NZD. So, either bond traders are wrong and the spreads will open up again or FX traders are playing catch up and AUD/NZD is overdue for a higher move - which will send the kiwi lower.
