NZD/USD slumps to test 1h 200-SMA, ignores China PMI

The NZD bulls failed to sustain the recovery beyond 0.71 handle, giving way to sharper sell-off in the Asian trades this Monday, with NZD/USD now deep in the red near session troughs.

NZD/USD offered just ahead of 0.71 handle

Currently, the NZD/USD pair drops almost 1% to test daily lows struck at 0.7076, having met fresh supply near the mid-point of 0.71 barrier. The Kiwi extends its bearish momentum into a second-day today, as the greenback remains favored across the board amid persisting poor risk condition, triggered by Italian PM Renzi in Sunday’s referendum.

Moreover, negative oil prices overshadowed upbeat Chinese services PMI data published by Caixin, showing a 53.1 reading in November versus 52.7 expectations and 52.4 prior. While NZ treasury’s upbeat assessment of the economy was also ignored by markets. ANZ Commodity Price Index rose 2.7% in November - ANZ

Focus now shifts towards the US datasets lined up for release later today, while risk-off markets will continue to drive the moves across the fx space, as dust settles over the Italian vote.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7100 (zero figure), above which it could extend gains to 0.7139/42 (50-DMA/ daily high) and from there to 0.7207 (100-DMA). To the downside immediate support might be located at 0.7069 (key support/1h 200-SMA) and from there to at 0.7035 (daily S2), below which 0.6949 (July low) would be tested.