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  • NZD/USD extends pullback from eight-day low after China’s welcome activity numbers.
  • China’s Caixin Manufacturing PMI followed the footsteps of official activity data in October.
  • Market consolidates recent risk-off mood ahead of Tuesday’s RBA, US presidential election.

NZD/USD picks up the bids around 0.6605 during early Monday. Even if the pair prints 0.10% intraday losses while taking rounds to the lowest since October 21 by press time, China’s private activity numbers have recently offered the reason to probe the sellers.

China’s October month Caixin Manufacturing PMI came in as 53.6 versus 53.0 expected and prior. In doing so, the private activity gauge from the dragon nation follows the NBS Manufacturing PMI, flashed during the weekend. As per the release, the official PMI reading grew past-51.3 forecast to 51.4 in October. Furthermore, upbeat prints of New Zealand’s seasonally adjusted Building Permits for September, released earlier in Asia, also probe NZD/USD bears with 3.6% MoM gains versus 0.2% revised prior.

Read: Caixin China Manufacturing PMI 53.6 beats estimates of 52.8 and prior read of 53

Other than the data, the risk tone also favors NZD/USD prices to flirt with the eight-day lows. Although the coronavirus (COVID-19) woes called for the second national lockdown in the UK, hopes of soft Brexit and recently positive activity numbers favor the market player while portraying the reset in risk barometers.

As a result, S&P 500 Futures rise 0.40% intraday whereas New Zealand’s NZX 50 bounces off negative region while taking clues from Australia’s ASX 200.

Looking forward, the US ISM Manufacturing PMI for October, expected 55.6 versus 55.4 prior, can offer immediate direction to the pair. However, major attention will be given to the risk catalysts like virus updates, news on the US stimulus, polls ahead of the American presidential election.

On a different page, analysts at Australia and New Zealand Banking Group said, “Beyond the knee-jerk safe-haven appeal of the USD, we’d expect the NZD to do rather better should the situation deteriorate, but we are also mindful of the US election this week, which introduces considerable uncertainty to the mix. Expect volatility.”

Technical analysis

An upward sloping trend line from September 24, currently around 0.6575, remains on the bears’ radars unless the quote clears the immediate upside barrier of 50-day EMA, at 0.6625 now.