- DXY extends the rout.
- The Yuan rally underpins.
The NZD/USD pair kicked-off a brand new week on a bullish note, as the bulls received a fresh boost from persistent broad USD weakness and a slump in the USD/CNY reference rate.
NZD/USD trades above all major DMAs
Amidst ongoing US dollar selling across the board, the Kiwi remains strongly bid and looks to regain the 0.73 handle, having refresh four-month tops at 0.7283 levels. The US dollar remains weighed down by monetary policy convergence and unimpressive US fundamentals while holiday-thinned light trading also exaggerates the bearish moves in the buck. The USD index slumps -0.20% to hit fresh three-year lows of 90.39.
Additionally, the New Zealand dollar tracks the strong gains seen in the Yuan,especially after the USD/CNY cross hit fresh 20-month lows 6.4189. The Yuan remains underpinned amid upbeat Chinese trade and CPI figures.
China’s Dec trade data (Yuan terms): Surplus widens on exports surge
China’s Dec CPI ticks higher, but misses estimates
The spot will continue to closely watch the USD dynamics and risk trends for fresh trading impetus amid thin liquidity, as the US markets remain closed on account of Martin Luther King Day.
The pair finds next resistances at 0.7283 (4-month tops), at 0.7300 (natural resistance), 0.7350 (psychological levels). Meanwhile, the supports are located at 0.7248 (5-DMA), 0.7207/00 (10-DMA/ zero figure) and 0.7150 (200-DMA).