NZD/USD peeps above 200-day MA

• Improved risk appetite is boding well for the NZD.
• The NZD/USD printed session highs above the 200-day MA soon before press time.

The NZD/USD has breached the 200-day MA of 0.6813 on the back of trade optimism and the resulting risk-on action in the equities.

The Asian stocks hit one-month highs and the offshore Chinese yuan rose to 5.5-month highs against the US dollar as US Treasury Secretary Mnuchin’s comments that China’s Vice Premier Liu may visit Washington for higher-level trade negotiations revived hopes of a breakthrough trade deal.

As a result, the kiwi dollar picked a bid below 0.68 in Asia and jumped to a session high of 0.6824 soon before press time.

The NZD/USD could extend the rally if the European stocks track Asian equities higher and Chinese yuan keeps or extends gains seen in Asia. Moreover, the Chinese currency is more likely to extend gains, as the record low on the USD/CNH (offshore yuan) risk reversals indicates that investors are adding bets to position for further weakness in the pair (strength in CNH).

NZD/USD Technical Levels