The kiwi has been trending weaker for the most part since last week, after the RBNZ moved to expand QE, opened the door to negative rates, and voiced out preference for a weaker currency to help with the current economic situation.
That saw the kiwi hit lows around 0.6520-25, testing the 100-week moving average against the dollar, and that held up as buyers have turned things around this week.
Dollar weakness remains the key theme at play in the major currencies space and NZD/USD buyers are also taking advantage of that. The push above the 200-hour MA (blue line) in trading yesterday was key as buyers now hold near-term control.
As such, they are extending the upside momentum today in a push to fresh highs last seen since 7 August @ 0.6647 currently.
From a technical perspective, there is little in the way stopping the pair from moving towards a key test of resistance around 0.6690-00 next. That will be the key line in the sand as the figure level has limited the upside move so far since July trading.
The turnaround in the pair - or kiwi outperformance I should say - also comes as AUD/NZD failed to firmly secure a daily breach above the 1.1000 handle in trading yesterday.
The pair had gained for 12 consecutive days prior to the drop yesterday so perhaps a technical correction at a key level was overdue. If anything, keep an eye on that as well when looking at NZD/USD to gauge how the kiwi is generally performing.
For now, AUD/NZD has broken below its 100-hour moving average @ 1.0969 and that is seeing the near-term bias keep more neutral but the 200-hour moving average offers more support @ 1.0915 so that will be the key near-term level to eye.