NZD/USD breaks lower towards 0.7050 on poor China PMI

The New Zealand dollar stalled its downside consolidative mode against its American counterpart, knocking-off the NZD/USD pair to fresh daily troughs below 200-DMA of 0.7069, following the release of worse-than expected Chinese manufacturing PMI report.

NZD/USD resumes declines, risk-off seeping back?

The major failed to sustain at higher levels, as the bears continue to guard 0.71 handle, triggering fresh sell-off on the release of poor Chinese data. China’s manufacturing PMI report published by Caixin dipped into contraction for the first time in eleven months, coming in at its lowest levels since February 2009.

Moreover, the Kiwi tracks steep losses seen in its OZ neighbour Aussie, after the AUD/USD pair slumped to 0.74 handle on dismal China PMI, shrugging-off upbeat Australian Capex and retail sales figures.

Meanwhile, higher treasury yields also weigh on the alternative higher-yielding Emerging market currency NZD. The spot appears to ignore higher oil prices and upbeat NZ trade index, as China PMI disappointment overshadows the positive catalysts.

Markets now await the US ADP jobs report and ISM manufacturing PMI report for fresh direction on the prices.

NZD/USD Levels to consider                                                                              

To the upside, the next resistance is located at 0.7122 (multi-week high), above which it could extend gains to 0.7147 (classic R2/ Fib R3) and from there to 0.7200 (round number). To the downside immediate support might be located at 0.7050/49 (psychological levels/ 10-DMA), and from there to 0.7026 (100-DMA), below 0.7000 (key support) would be tested.