NZD/USD Turns Positive on China Trade, Nears 0.7000
Having bottomed out at 0.6946 levels in early Asia, the NZD/USD pair takes on the recovery towards 0.70 handle, running though fresh bids on the release of Chinese trade data.
NZD/USD finds support near 5-DMA
Currently, the NZD/USD pair trades marginally higher at fresh session highs of 0.6994, now heading for a test of 0.70 barrier. The Kiwi wiped-out losses and peeked into the green after the Chinese trade data showed narrowing surplus, although the imports dropped less than expected, which turned out to be the main catalyst behind the fresh bids seen in the NZD. New Zealand is highly dependent on China for its exports.
China’s exports fell 4.1% y/y in May and matched estimates, while imports dropped just 0.4%, against a 6.8% decline expected.
However, the upside lacks follow through as markets remain cautious heading into the RBNZ policy decision due at Asian open tomorrow. While the Chinese inflation data also due for release tomorrow keeps the traders on the back foot.
NZD/USD Levels to consider
To the upside, the next resistance is located at 0.7000 (psychological levels), above which it could extend gains to 0.7055 (May high). To the downside immediate support might be located at 0.6949/46 (5-DMA/ daily low) and from there to at 0.6900 (round number/ daily S1).