"There was a growing feeling that maybe it has gone too far too fast, even though the longer-term trend does remain downward," said Peter Cavanaugh, an adviser at Bancorp Treasury Services. "It just seems to be one of these normal corrective phases that it has to go through to solidify the trend."

Traders who had bet on the kiwi currency's decline may be taking profits in a quiet data week, some analysts said.

This afternoon, the Reserve Bank will release data on high-debt mortgage lending for May.

The New Zealand dollar advanced to 61.50 euro cents from 61.32 cents yesterday as Greece's negotiations with its creditors remain unresolved as the deadline for a 1.6 billion euro payment to the International Monetary Fund looms next week.

Eoin Treacy's view

The New Zealand Dollar has experienced an aggressive decline over the last couple of months so there is potential for an unwind of the short-term oversold condition.
 
However, the medium-term pattern remains bearish with a completed type-3 top in evidence. Considering that many associate the Kiwi Dollar with commodities and its high yield, these topics will come more into focus following any steadying. A sustained move above the declining 200-day MA would be required to begin to question the medium-term bearish outlook. 

The weakness of the currency has acted as a salve for the stock market in nominal terms and the region of the trend mean will need to hold if the medium-term uptrend is to be given the benefit of the doubt. 

The Australian Dollar has at least paused in its decline and the ASX 200 has bounced to test the short-term progression of lower rally highs. It will need to hold the 5500 area on the next pullback if medium-term scope for continued higher to lateral ranging is to be given the benefit of the doubt.