NZD/USD slips below 0.6000 ahead of China PMI
- NZD/USD extends the previous day’s losses.
- The US dollar remains on the recovery mode, risk-tone seesaws amid mixed messages.
- China’s PMI can offer immediate direction, virus news stays as the main catalyst.
NZD/USD declines to the intraday low of 0.5998 amid the early Tuesday’s Asian session. While the US dollar pullback portrayed the pair’s U-turn from the two-week high the previous day, recently dollar positive updates, coupled with downbeat signals from New Zealand, seems to exert additional burden on the pair.
Not only US President Donald Trump’s statement that turns down the call for nationwide stay-at-home orders but Treasury Secretary Steve Mnuchin’s indication on economic impact payment also firmed up the greenback off-late.
On the other hand, New Zealand’s Health Minister David Clark signaled that some restrictions levied due to the coronavirus (COVID-19) pandemic will remain in place for a longer time.
It should also be noted that the record low prints of the weekly consumer confidence from Australia, the largest customer, to 65.3 from 72.2, added weakness to the pair.
Even so, the market's risk-tone keeps the mild optimism, portrayed the previous day, as the US stock futures take clues from Monday's positive close of Wall Street.
Looking forward, China’s March month official Manufacturing and Non-Manufacturing PMIs will offer the immediate directions to the pair traders while news/updates concerning the pandemic can keep the driver’s seat. About the China data, forecasts favor a bit of recovery from the previously disappointing numbers. However, below 50.00 levels are likely to remain in place for both activities, suggestion contraction, which in turn could join hands with the virus pessimism to keep the bears’ hopeful.
Technical analysis
Not only a 21-day SMA level of near 0.6040 but the recent high near 0.6040 but Friday’s high surrounding 0.6070 will also stop buyers in a case of the pair’s rise. Alternatively, sellers will wait for a clear break below 0.5915.