NZDUSD
NZDUSD trades 0.15% higher at 0.6535 retreating from daily highs at 0.6561 that hit the pair during the Asian trading session supported by the decision on New Zealand banks’ capital requirements from the RNNZ. The adequate level of Tier-1 capital for the New Zealand banks will be 16%, and the transition period has been extended to seven years from five. The new rules will take effect in July 2020.
NZDUSD started a correction from four-month highs during the European session and hit the daily lows after stronger data from USA. The United States Trade Balance registered in at $-47.2B, beating forecasts of $-48.7B in October.
US weekly initial jobless claims came in at 203k better than expectations of 215k, the 4-week average came in at 217.75K above expectations of 217.544K in November.
The pair yesterday again retreated from daily highs (0.6539) after the New Zealand GDT Price Index dropped to -0.5% below expectations of 0.5%. The global dairy trade auction average price registered at $3,467. The anhydrous Milk fat dropped 5.1%, the Whole Milk Powder increased by 0.1% at $3,331, while the Butter Milk Powder increased by 1.6% at $2,846.
NZD kiwi supported the previous sessions by stronger Chinese manufacturing data. The China Caixin Manufacturing PMI came in at 51.8 beating expectations of 51.4 in November. The China manufacturing PMI came in at 51.8, the October reading was at 51.7.
NZDUSD bulls try for the second day to conquer the 200-day moving average but as of writing without success. The bullish momentum is intact as the pair trades above the 50 and 100-day moving average.
Bulls are in control of the NZDUSD trend but need a settlement above the 200-day moving average that might initiate another leg higher. Strong resistance for the pair will be met at 0.6561 the daily top. Beyond that level the next supply zone stands at 0.6568 the high from August 4th. In case that the pair breaks above that level the next target is the high from July at 0.6641.
The pair has reached overbought levels as the RSI 14 in the daily chart today has entered overbought levels, so some profit-taking can’t be ruled out.
Looking south, first support stands at 0.6518 the daily low while below that level the next support comes at 0.6493 the low from December 3rd. The 100-day moving average will provide extra support at 0.6406. Bears with short positions will target the next support at 0.6372 the 50-day moving average.