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NZD/USD floats above 0.6300 on firmer NZ data, focus on PBOC, Fed’s Powell

  • NZD/USD stays defensive after three-week downtrend, pares recent losses amid a quiet session.
  • New Zealand Business PSI rose past 52.2 prior to 55.2 in May.
  • Hawkish Fed, recession fears favor US dollar, news from China probe Kiwi bears.
  • Light calendar highlights the risk catalysts for fresh impulse.

NZD/USD grinds higher around 0.6320 while consolidating the previous three-week advances during Monday’s Asian session. The kiwi pair’s latest gains could also be linked to New Zealand’s services activity data for May, as well as headlines from China.

New Zealand’s Business NZ PSI for May rose past 52.2 prior reading to 55.2. The private activity data joins upbeat figures of Business NZ PMI data flashed the last week, which in turn propel the hopes of another hawkish surprise from the Reserve Bank of New Zealand (RBNZ).

A piece of news from Reuters saying, “President Joe Biden's administration is reviewing the removal of some tariffs on China,” joins upbeat news from Beijing that suggests receding covid fears to favor the NZD/USD pair’s rebound.

Furthermore, Friday’s downbeat US data offer additional upside momentum to the Kiwi pair. That said, US Industrial Production for May dropped to 0.2% MoM, below 0.4% market forecast and 1.4% prior. The details suggested steady Capacity Utilization and a contraction in the manufacturing output. While the US data were softer, the Federal Reserve’s (Fed) bi-annual Monetary Policy mentioned the Gross Domestic Product (GDP) appears to be on track to rise moderately in the second quarter, per Reuters.

It should be, however, that China’s testing of anti-ballistic missile and hawkish Fedspeak are some of the main clues that exert downside pressure on the NZD/USD prices. Recently, Federal Reserve Governor Christopher Waller mentioned that he will support a 75 bps interest rate hike in July policy if data matches his expectations.

Amid these plays, the US equities marked an unconvincing relief rally while the Treasury yields were also sluggish.

Looking forward, Testimony from Fed Chairman Jerome Powell become this week’s key event amid a light calendar at home. That said, today’s interest rate announcement from the People’s Bank of China (PBOC) could also entertain NZD/USD traders if managed to surprise the markets with any rate change.

Technical analysis

Despite the corrective pullback, NZD/USD battles the 10-DMA immediate hurdle surrounding 0.6330, a break of which could direct the quote towards early June’s swing low near 0.6360. Until then, the Kiwi pair is likely to remain directed towards the yearly low marked in the last week around 0.6195. 

Additional important levels

Overview
Today last price0.6319
Today Daily Change0.0003
Today Daily Change %0.05%
Today daily open0.6316
 
Trends
Daily SMA200.643
Daily SMA500.6497
Daily SMA1000.6642
Daily SMA2000.6784
 
Levels
Previous Daily High0.639
Previous Daily Low0.6269
Previous Weekly High0.6396
Previous Weekly Low0.6197
Previous Monthly High0.6569
Previous Monthly Low0.6217
Daily Fibonacci 38.2%0.6315
Daily Fibonacci 61.8%0.6344
Daily Pivot Point S10.626
Daily Pivot Point S20.6204
Daily Pivot Point S30.6139
Daily Pivot Point R10.6381
Daily Pivot Point R20.6446
Daily Pivot Point R30.6502

Author

Anil Panchal

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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