Saturday, March 17, 2018
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NZD/USD re-attempts 0.7200 post-upbeat China PMI
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  • Weighed by rising DXY, at five-week tops.
  • Losses capped by upbeat Chinese Caixin manufacturing PMI?
  • Focus shifts to US data and Powell’s testimony.

The NZD/USD pair extended its bearish momentum for the third straight session and went to hit fresh three-week lows at 0.7187 levels amid strengthening demand for the US dollar across the board.

NZD/USD: Supported well above 200-DMA at 0.7167

The spot is seen making minor recovery attempts and looks to regain the 0.72 handle, as the bulls were offered some respite from the unexpected improvement seen in the Chinese manufacturing sector activity, as reported by Caixin earlier today.

China’s Caixin Manufacturing PMI surprises positively in Feb

However, it remains to be seen if the major can sustain the recovery mode, as risk-off sentiment seen across the Asian markets continue to weigh negatively on the higher-yielding currency, the NZD. Meanwhile, the Kiwi tracks the declines in its OZ neighbor, the Aussie, after the Aus capex data disappointing markets.

From a broader perspective, the divergent monetary policy outlooks continue to remain in the favor of the greenback, given the recent hawkish surprise delivered by the new Fed Chair Powell while the RBNZ is expected to remain on hold in the coming months, despite reasonable NZ fundamentals.

Later today, the pair will take cues from the US core PCE price index, jobless claims and ISM manufacturing PMI ahead of the Fed Chair Powell’s testimony before the Senate Banking Committee.

NZD/USD levels to watch

Haresh Menghani, Analyst at, notes: “The pair is likely to accelerate the fall towards 100-day SMA support near the 0.7170 region before eventually aiming to test the 0.7100 round figure mark. Meanwhile, on the upside, 0.7240-45 area (50-day SMA) now seems to act as an immediate resistance, above which a bout of short-covering could lift the pair back towards the 0.7300 handle en-route 0.7335-40 supply zone.”

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