NZD/USD closes bearish opening gap on China trade, what next?

The bulls are seen extending control following the release of mixed Chinese trade numbers, helping NZD/USD to fill in the bearish opening gap beyond 0.69 handle.

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The spot reversed a sharp downward spike to 0.6888 lows and now looks to extend the renewed uptick back towards 0.6930 region, largely on the back of a rally in oil prices, which underpins the sentiment around the resource-linked NZD.

Moreover, markets appear to cheer upbeat Chinese headline trade data, which showed widening trade surplus in both Yuan as well USD terms. However, it remains to be seen if the spot sustains the upmove amid mixed Asian equities and a broadly higher US dollar, in the wake of Macron trade unwinding.

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Data-wise, it’s a big week for the Kiwi, with the Chinese inflation figures and RBNZ policy decision due this week. In the meantime, focus now shifts towards the US LMCI data due later in the NA session today.

NZD/USD Levels to consider                                                                              

To the upside, the next resistance is located at 0.6930 (2-day high), above which it could extend gains to 0.6948 (20-DMA) and from there to 0.6977 (50-DMA). To the downside immediate support might be located at 0.6850 (psychological levels), and from there to 0.6837 (multi-month lows), below 0.6800 (key support) would be tested.