NZD/USD At Three-Month Highs, Back above 0.6200

The Kiwi has strengthened to 3 month highs, the market is now pricing in two Fed rate cuts heading into year end while strong China PMIs data released on Wednesday have help bolster the currency. Earlier, ANZ commodity prices rose 1.1% in May, up from 0.5% in April.

• NZD/USD has broken back above 0.6200, hitting an intraday high of 0.6215. Further upside moves could be capped by a large call option, strike at 0.6200 with a FV of NZ$1.53b expiring June 12th.
• Initial resistance is 0.6218 (Mar 8th Highs), above here 0.6280 (Jan 12th high) becomes a target, while initial support holds at 0.6121 (20-day EMA). The US-NZ 2Y swap is 4bps higher at -30.5bps
• AUD/NZD has edged slightly higher today, up 0.17% at 1.0753. The AUD is the top performing G10 currency, benefitting from some warnings shots fired from RBA gov around inflation. Resistance is 1.0774 (June 5 highs), a break back above here would open a retest of the 1.0800 area. Initial support is 1.0700 (Mar 12 lows / round number) a break below here would open a retest of 1.0665 (Mar 5 low).
• NZD/JPY is little changed today, but trades just off recent multi-year highs 96.857 at 96.527. Initial support is 95.51 (20-day EMA), while initial resistance is 97.793 ( Sept 2007 highs)