Search ForexCrunch
  • NZD/USD refresh intraday high even as China’s Caixin Manufacturing eases in December.
  • Risks dwindle amid virus woes, fresh US-China tussle, US stimulus, vaccine hopes combat the bears.
  • Monthly PMIs, risk catalysts can offer a slow start to 2021 ahead of Friday’s US NFP.

NZD/USD takes the bids near 0.7200 during early Monday. The pair recently ignored China’s downbeat activity numbers while refreshing the daily high. The reason could be traced to the US dollar weakness at the start of 2021.

China’s Caixin Manufacturing PMI eased below 54.9 expected and prior to 53.00 in December. Although weaker than expected data from one of the largest customers should have dragged the NZD/USD prices down, US dollar weakness favors the kiwi bulls by the time of writing. That said, the US dollar index (DXY) marks 0.26% intraday losses while declining to 89.70 by press time.

Read: Chinese December 20 Caixin Manufacturing PMI 53.0 vs exp 54.7; prev 54.9

Other than the data, changes to market mood should also weigh on the kiwi pair. Trading sentiment sours off-late amid fears of the coronavirus (COVID-19) and fresh US-China tussle off-late. Japan and the UK are battling the jump in the pandemic numbers even as vaccinations are up. On the other hand, the US eyes more Chinese companies’ delisting from the New York Stock Exchange and Beijing frets about it.

On the positive side, Nancy Pelosi’s re-election as the US House Speaker suggests an easy road for future American stimulus. However, Georgia’s runoff will be decisive for the Senate and shouldn’t be ignored.

Amid these plays, S&P 500 Futures wavers around the record top near 3,750 while stocks in Australia and New Zealand stays in the green by press time.

Moving on, the second estimation of December’s activity data from the US will join more details on the virus, vaccine and the US covid aid package to determine near-term NZD/USD direction. However, nothing will be much intermediate than Friday’s December employment data from the US.

Technical analysis

Although overbought RSI conditions challenge NZD/USD bulls, a two-month-old ascending trend line, at 0.7122 now, restricts the quote’s short-term downside.