NZD/USD is also benefiting from some loss of dollar momentum in early morning trade in Europe

NZD/USD D1 22-02

The pair moved to a low of 0.6758 earlier in the day after the RBNZ suggested that it could pursue rate cuts should bank capital rise over the next few years. Emphasis there being on 'the next few years'. Rate cuts are certainly a negative for the kiwi but really, who knows what would happen in 5-7 years' time?

NZD/USD made its way back to 0.6780 levels now before getting a bit more of a boost after China refuted the Reuters report on Australia's coal-ban moments ago. The pair is now making its way back to the 0.6800 handle, as buyers and sellers battle it out to establish a trend.

From the daily chart, buyers are holding on to the confluence of support from the 100 and 200-day moving averages near 0.6750. That will be a key level to watch out for in the event a downside move materialises in trading over the next few sessions.

NZD/USD H1 22-02

Meanwhile, the near-term chart continues to suggest that sellers are in control as price holds below both key hourly moving averages. Hence, it is very much a showdown between buyers who are defending the daily moving averages and sellers who are keen to keep price below the 0.6800 handle as well as the hourly moving averages.

Near-term resistance is now seen around 0.6795-00 before the 200-hour MA (blue line) comes into play @ 0.6830.

As mentioned above, the story of rate cuts is not good news for the kiwi but with the idea of it only taking place over the next few years, it's hard to imagine it weighing on the currency all too much. That said, sellers are still in near-term control so headlines like that will serve to help their agenda in driving price lower.

But I'd be wary of support from the daily moving averages before chasing another extension to the downside from here.