NZD/USD hits 8-day low, but defends 0.73 handle

• Kiwi fell to 0.7307 in Asia - the lowest level since Feb. 14.
• Broad based USD strength and risk aversion hurt the NZD.
• The pair is holding above 0.73 in Asia.

The American dollar surged across the board as the 10-year treasury yield rose to 2.96 percent after the Fed minutes release.

The uptick in the yields also weighed over the US stock markets. The Dow dropped more than 400 points in the last 2 hours of NY trade, and as of writing, the futures are reporting a drop of 0.20 percent or 48 points.

Amid broad-based USD strength and risk aversion in the stocks, NZD/USD fell from 0.7386 to an eight-day low of 0.7307.

The minutes of the January Fed meeting revealed that many policymakers believe the stronger growth has increased the chance of future rate hikes. These positive comments seem to have put a bid under the USD, indicating the investors have begun repricing a more hawkish Fed. That said, most in the markets do not expect the Fed to the Fed to shift from three to four hikes this year in its median outlook.

As of writing, the spot is trading largely unchanged on the day at 0.7318.

NZD/USD Technical Levels

Previous day's bearish outside day candle adds credence to the argument that the pair has topped out at 0.7437 (Feb. 16 high). So, the pair could break below 0.73 (psychological level) and extend losses to 0.7222 (upward sloping 50-day MA) and 0.72 (zero levels).

On the higher side, breach of resistance at 0.7330 (10-day MA) would open up upside towards 0.7386 (previous day's high) and 0.74 (psychological resistance).