(Bloomberg) -- A strong rally in the New Zealand dollar has wiped out about half its losses for the year, but further gains look harder to come by as technical resistance meets cooling investor sentiment.

The kiwi has surged over 13% from a mid-October low, climbing for six straight weeks, amid broad dollar weakness and a record rate hike from the Reserve Bank of New Zealand. Momentum indicators suggest the move is overdone and the currency’s 200-day moving average looms as a closely-watched technical resistance level.

Consumer confidence in New Zealand is falling again, the latest retail sales figures missed estimates and the central bank governor himself said monetary policy is now contractionary. The currency slipped 0.2% Friday to around 62.50 US cents.

“Sharp increases in the cost of living and interest rates (not to mention falling house prices) are clearly hurting confidence, but excellent job security and strong wage growth have so far seen spending hold up far better than this level of confidence would normally imply,” wrote Sharon Zollner, ANZ New Zealand Chief Economist in a note. “This dynamic is likely to be on borrowed time.”

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