NZD/USD: Mildly bid above 0.7000, ignores China’s Caixin Manufacturing PMI

NZD/USD wavers around 0.7120 even as China’s November month Caixin Manufacturing PMI flashed upbeat results during early Tuesday. However, the kiwi pair cheers the US dollar weakness, as well as risk-on mood, while keeping the upside momentum intact beyond the 0.7000 round-figure.

By crossing 53.5 forecast and 53.6 prior, Caixin Manufacturing PMI tracks official NBS Manufacturing PMI that defied 51.5 expected and 51.4 previous with 52.1 during the previous day.

Read: China Caixin Manufacturing PMI at 54.9 beats 53.5 exp and 53.6 prior, 10-year highs

While the US dollar’s bounce off a fresh low since April 2018 dragged NZD/USD back from a nearly 2.5-year high on Monday, the greenback sellers returned amid hopes of further stimulus from the US. In their prepared remarks for today’s testimonies, Fed Chair Jerome Powell and Treasury Secretary Steve Mnuchin pitched moderating economic recovery while pushing for the much-awaited aid package.

Other than the stimulus hopes, news that Moderna is ready to file for the emergency use of its covid vaccine to the US Food and Drug Administration (FDA) also favor the risks.

That said, S&P 500 Futures and major stocks in Asia-Pacific print gains but NZX 50 remains mildly offered as fewer clues are suggesting additional monetary easing from the RBNZ.

Moving on, the kiwi traders may keep their eyes on the risk catalysts and await monetary policy results from the RBA for immediate direction. However, major attention will be given to the Fed Chair Powell’s testimony and the early-month PMI data from the US, to be published during the later Tuesday.

Technical analysis

NZD/USD sellers are less likely to enter above the 0.7000 threshold, not to for about the December 2018 top near 0.6970. As a result, bulls can keep attacking the mid-2018 peak surrounding 0.7050 while eyeing March 2018 low near 0.7150.