NZD/USD Price Analysis: Keeps pullback from key hurdle near 0.7070 after China Caixin PMI
- NZD/USD holds lower ground after downbeat activity numbers from the key customer.
- China’s industry gauge of manufacturing activity contracts for the first time after April 2020.
- Two-month-old resistance line guards immediate upside, rising trend line from August 20 challenge bears.
- RSI pullback from overbought area hints at further consolidation of late August gains.
NZD/USD rebounds from intraday low but stays pressured around 0.7040–45 during early Wednesday. In doing so, the Kiwi pair struggles to justify China’s PMI data while keeping the previous day’s U-turn from a downward sloping resistance line from early July.
China's Caixin Manufacturing PMI slipped to contraction, down 49.2 versus 50.1 expected and 50.2 prior, for the first time in 16 months.
Read: China's Caixin Manufacturing PMI contracts to 49.2 in August, misses estimates
Given the RSI line’s recent consolidation from the overbought area, NZD/USD prices may extend the pullback moves towards a short-term support line, near the 0.7000 threshold.
However, the 200-SMA level of 0.6972 adds to the downside filters and will challenge the pair sellers afterward, if at all they dominate past 0.7000.
Meanwhile, an upside clearance of the stated resistance line around 0.7070 will direct NZD/USD bulls to highs marked in August and July, near 0.7085 and 0.7105 respectively.
Should, the pair buyers keep reins above 0.7105, the early June’s low near 0.7125 will challenge them.
NZD/USD: Four-hour chart
Trend: Pullback expected