NZDUSD moves to cluster of resistance

The NZDUSD got a kick higher earlier in the day after the Bank of China announced that they would lower the reserve requirement.

Technically the price moved above its 100 hour moving average (blue line in the chart above) and found additional momentum to the upside.

The initial high price in the early European session, moved up to test the 100 day moving average (high blue line at 0.6260), but backed off modestly. The rally off the corrective low has moved back toward that key 100 day moving average. The high price reached 0.62593. The 100 day moving average is at 0.62603. Also nearly 100 day moving average is a swing area between 0.6250 and 0.62639, and the high prices from earlier this week.

Needless to say there is some key resistance up to 0.62639. A break above would increase the bearish bias.

Of course, the resistance is resistance for a reason. The highs from the past and the 100 day MA, are seeing sellers near the area as risk can be defined in risk be limited against the area. If the price does stall the rally once again, a move back toward the 50% midpoint of the February trading range at 0.6236. Move below that level and a rotation lower cannot be ruled out. The 100 hour moving averages rising and currently at 0.62079.

Helping the upside is lower interest rates. The US two-year yield is now down near 21 basis points at 3.9208 %. The 10 year yield is down 20 basis points at 3.3838%. That is clearing closer to the low price from yesterday's trade at 3.369%. The price subsequently rallied up to a high of 3.59%.

The probability of a 25 basis point hike next week is now 71% while 29% expect no change in rates.

Not helping the currency is the potential for risk off flows to kick in. So far that has not happened but US stocks are now near low levels with Dow Industrial Average down -165 points or -1.44%. The S&P is down -53 points or -1.36% and the NASDAQ index is down -140 points or -1.20%.