NZD/USD bid for third day straight, eyes China Caixin PMI

• NZD/USD is looking north as Fed’s dovish turn and the resulting rise to six-week highs on Thursday bolstered the already bullish technical setup.  
• An above-50 China Caixin PMI reading could yield a break above 0.6939.

NZD/USD is trading in the green in Asia for the third day straight and could challenge six-week highs set yesterday if China data, due at 01:45 GMT, beat estimates by a big margin.  

The currency pair jumped to 0.6939 on Thursday – the highest level since Dec. 5 – on the back of dovish Fed, bolstering the bullish view put forward by the pennant breakout, confirmed on Jan. 25.  

Bullish pressures were likely accentuated by ratings agency S&P’s decision to revise higher New Zealand’s credit outlook to positive and Trump’s comments on the US-China trade negotiations.  

The American dollar, however, did bounce back a little, although with the odds of Fed rate cut on the rise, the path if least resistance for the greenback is to the downside.  

NZD/USD, therefore, could soon yesterday’s high of 0.6939 and could break higher if China Caixin PMI, which surveys small and medium-sized export-oriented units, prints above 50.00, signaling expansion in the manufacturing sector.  

NZD/USD Technical Levels