NZD/USD consolidates monthly losses below 0.6900 after China PMIs

NZD/USD grinds lower, seesaws around intraday high of late.
China NBS Manufacturing PMI contracts, Caixin Manufacturing PMI improves in August.
NZ PM Ardern backs Auckland boundary limit despite the alert level 2 conditions.
US Senators agree on stop-gap funding but debt ceiling, stimulus and other risk catalysts loom.

Anil Panchal FXStreet

NZD/USD holds lower ground near the five-week bottom, mildly bid of late around 0.6880 during early Thursday. In doing so, the kiwi pair pays a little heed to the mixed PMI data from China while concentrating on the US dollar pullback. However, cautious sentiment keeps the recovery moves in check.

Although China’s official NBS Manufacturing PMI for August dropped below 50.00 level for the first time since February 2020, the Caixin Manufacturing PMI rose past 49.5 expected and 49.2 prior to the 50.00 level at the latest. Further, the official Non-Manufacturing PMI rose past 47.5 prior and 52.7 expected to 53.2.

Earlier in the day, New Zealand Building Permits rose past 2.3% forecast to 3.8% for August whereas the ANZ Business Confidence for September dropped past -6.8 previous readouts to -7.2 while the ANZ Activity Outlook remained unchanged at 18.2% for the stated month.

US policymakers’ ability to avoid the government shutdown seems to underpin the latest risk-on mood, helping the NZD/USD. Also on the positive side is the news of AstraZeneca’s covid vaccine showing 74% efficacy in the large US trial seems to have underpinned the latest hopes of overcoming the Delta covid crisis.

Furthermore, mixed concerns over the emergency alert level conditions in Auckland after the recent jump in covid numbers also confuse NZD/USD traders. While New Zealand Prime Minister (PM) Jacinda Ardern states, per NZ Herald, to keep the state boundary intact even during the next weeks’ level 2, senior Government Minister Chris Hipkins rules out challenges to easing the NZ activity restrictions.

However, the US diplomats are yet to solve the riddle concerning the infrastructure spending bill and extension of the debt ceiling, which are the key issues challenging the market sentiment of late. Also, the Fed's tapering woes and fears that China's power cut issues will join the Evergrande saga to drown the world’s second-largest economy back towards the pandemic-era economic performance question the risk-on mood.

Against this backdrop, the US 10-year Treasury yields print 3.0 basis points (bps) of a fall to 1.51%, extending pullback from a six-month high flashed the previous day. However, the S&P 500 Futures rise 0.30% intraday to keep Wednesday’s rebound from a weekly low.

While the mixed data may not have helped the NZD/USD prices but the updates from the US Senate can keep the buyers hopeful for a while before the Fedspeak and China woes regain the market’s attention.

Technical analysis

Unless bouncing back beyond July’s low near 0.6880, NZD/USD remains vulnerable to visit the yearly bottom surrounding 0.6800.

Additional important levels

Overview
Today last price	0.6876
Today Daily Change	0.0006
Today Daily Change %	0.09%
Today daily open	0.687

Trends
Daily SMA20	0.7062
Daily SMA50	0.7013
Daily SMA100	0.7056
Daily SMA200	0.7113

Levels
Previous Daily High	0.6965
Previous Daily Low	0.6859
Previous Weekly High	0.7094
Previous Weekly Low	0.6982
Previous Monthly High	0.7089
Previous Monthly Low	0.6805
Daily Fibonacci 38.2%	0.6899
Daily Fibonacci 61.8%	0.6925
Daily Pivot Point S1	0.6831
Daily Pivot Point S2	0.6792
Daily Pivot Point S3	0.6725
Daily Pivot Point R1	0.6937
Daily Pivot Point R2	0.7004
Daily Pivot Point R3	0.7043

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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