The kiwi is the weakest performing major currency to start European trading
The kiwi may have gotten good news earlier in the day as the government pledges a fiscal boost towards infrastructure investment. However, that quickly dissipated as the kiwi met offers against the aussie and that is hinting at buyers feeling a bit exhausted.
For NZD/USD, price looks to have been capped by the 61.8 retracement level @ 0.6567 with price action even now slipping back below the 200-day MA (blue line).
Here's a look at the AUD/NZD bounce just under the 1.04 handle earlier today:
If we look closer at NZD/USD in the near-term:
We can see that buyers have twice tried to regain near-term control but failed upon a test of the 100-hour MA (red line). The latest being after the kiwi ran into offers against the aussie, which dragged it lower (AUD/NZD higher).
As things stand, price action is now trapped between both key hourly moving averages. But if price starts to slip under the 200-hour MA (blue line), that will be the real worry for buyers as we may see a further retracement towards 0.6500 or lower next.
In the bigger picture, I'm still quite keen in looking for further downside in AUD/NZD to bolster the kiwi but perhaps for now this is a good spot to scale out some longs in case we see a further retracement amid some technical exhaustion.
