- NZD bulls flex their muscles on upbeat Chinese PMI and risk-on mood
- Upbeat market mood downs the US dollar across the board.
- US’ softer stance on China over Hong Kong adds to thin trading.
The bid tone around the NZD/USD pair strengthened following the release of the upbeat Chinese Caixin May Manufacturing PMI, driving the pair to hit the highest levels in three months at 0.6247.
At the press time, the spot trades at 0.6238, still up 0.63% on the day. The higher-yielding currencies such as the Antipodeans are lifted by a risk-friendly market environment. The risk appetite got boosted after US President Donald Trump refrained to take a hardline approach to China and its trade deal over the Hong Kong security issue last Friday.
Meanwhile, broad-based US dollar weakness amid the improved market mood and intensifying riots in the US cities also adds to the upsurge in the spot. Further, thin market conditions on the back of a national holiday in New Zealand likely exaggerate the move in the kiwi.
Looking ahead, the US dollar price action and risk sentiment will continue to play out amid holiday-thinned trading and ahead of the key US ISM Manufacturing PMI release.
From a short technical perspective, the bulls now look for a convincing break above 0.6250, with eyes set on the 200-DMA barrier at 0.6314. To the downside, any correction could see the immediate support at 0.6206/0.6196 (5-DMA/ daily pivot point) and 10-DMA at 0.6170.
NZD/USD additional levels to watch
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