- NZD/USD knocked down to fresh daily troughs following the release of worse-than-expected Chinese manufacturing PMI.
- China's Caixin manufacturing PMI for May arrived at 49.6 vs 50.1 expected and 50.3 last, slipping into contraction on slower increases in output and new orders.
- China PMI disappointment counters rise in oil prices and upbeat New Zealand trade index.
- The pair is holding above daily cloud with strong support by cloud top at 0.7059 and 100-DMA at 0.7057.
- Weakness likely on close below 5-DMA, scope then for test of 20-DMA at 0.6966.
- On the flipside decisive breakout above 200-DMA could see test of 0.7285 (channel top).
Support levels - 0.7074 (5-DMA), 0.7030 (38.2% Fib of 0.7375 to 0.6817 fall), 0.6966 (20-DMA)
Resistance levels - 0.7106 (200-DMA), 0.7150 (March 2 high), 0.7162 (61.8% Fib), 0.72
Recommendation: Good to go short on break below 100-DMA at 0.7057, SL: 0.71, TP: 0.70/ 0.6970/ 0.6950.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -1.36697 (Neutral), while Hourly USD Spot Index was at -30.2935 (Neutral) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
