- NZD/USD fades post-data corrective pullback, prints two-day losing streak.
- China NBS Manufacturing PMI eased but Non-Manufacturing PMI jumped in May, ANZ data came in weaker.
- Risk appetite stays indecisive amid off in US, banters over China.
- US off, downbeat catalysts can favor intraday sellers.
NZD/USD struggles to keep the bounce off 0.7231 while taking rounds to 0.7250, down 0.20% intraday, during early Monday. In doing so, the kiwi pair justifies indecisive momentum and data published from China as well as from home.
NBS Manufacturing PMI eased below 51.1 forecast and prior to 51.1 in May whereas the Non-Manufacturing PMI marked a big beat to the 52.7 market consensus and 54.9 previous readouts with 55.2 figures. Further, the Australia and New Zealand Banking Group’s (ANZ) Business Confidence and Activity Outlook for May dropped below 7 and 32.3% levels to 1.8 and 27.1% respectively.
Read: China PMIs: May official composite PMI at 54.2, Services big beat
Not only sluggish data, mostly downbeat, put a cap on the NZD/USD recovery moves, but downbeat sentiment also weighs on the pair prices.
Among the risk catalysts, New Zealand’s recently souring relations with China and the Sino-American tussles join reflation woes to test the market optimism. Meanwhile, hopes of further stimulus from the US and the Fed’s ability to keep the easy money on the battle the bears.
Against this backdrop, S&P 500 Futures struggle to keep the 4,200 threshold, up 0.12% intraday by the press time, while the bond markets are dead due to the long weekend in the US.
Moving on, worries of escalating tussles with China and fears of Beijing’s growth peaking out may keep NZD/USD intraday sellers hopeful amid a likely quiet day. “the NZD story remains a positive one, with the economy likely sufficiently strong that it can sustain some normalization in monetary policy that is likely to occur sooner than peers. That speaks to broad-based NZD elevation,” said the latest ANZ report.
Technical analysis
Although the recent bounces direct NZD/USD buyers toward the 0.7300 threshold, multiple tops marked since early January around 0.7320-05 can restrict the pair’s further upside. Alternatively, the convergence of 100-day SMA and an ascending trend line from early April, near 0.7180, becomes the strong support to watch during the fresh downside.
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