A key China data has bettered estimates and intraday charts are reporting a breakout. Even so, the NZD/USD pair is struggling to gather upside traction.
China’s Caixin Manufacturing PMI (Sep), which focuses on the small and medium-sized export-oriented units, rose to 51.4, beating the expected print of 50.2 by a big margin. A reading above 50 indicates expansion.
So far, the upbeat China factory activity data has not put a strong bid under the NZD and other commodity dollars like the AUD. Notably, the NZD/USD pair is currently trading at 0.6270, having clocked a high of 0.6276 following Caixin’s release.
The inability to cheer the upbeat headline could be associated with the fact that the new export business saw a further reduction in September.
That said, the 5-minute chart is currently reporting a bullish divergence of the moving average convergence divergence histogram (MACD) and a falling wedge breakout on the relative strength index (RSI). A falling wedge breakout is a bullish pattern.
Put simply, the pair could revisit the session high of 0.6294 reached in the Asian session. The bullish case would weaken if the pair finds acceptance below Sept. 20’s low of 0.6255.
5-min chart
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Trend: Recovery likely
Technical levels
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