NZD/USD: Bulls eye 0.7800 even as China prints downbeat Caixin Manufacturing PMI

• NZD/USD wavers around intraday low prints 0.70% gains on a day.
• China’s Caixin Manufacturing PMI followed NBS reading to print a nine-month low in February.
• Risks remain elevated, help Antipodeans amid vaccine, stimulus news.
• RBA acts again, pushes RBNZ for a move.

NZD/USD pays a little heed to China’s Caixin Manufacturing PMI data as risk-on mood, US dollar weakness favors the quote around 0.7275, up 0.68% intraday, during early Monday. The kiwi pair bounced off key support confluence and stays on the path to consolidate Friday’s heavy losses amid mixed signals.

China’s Caixin Manufacturing PMI dropped to 50.9 versus 51.5 expected and prior readings. In doing so, the activity gauge from the world’s largest industrial player, also New Zealand’s (NZ) key customer, weakened to the lowest levels last seen in May.

Read: Caixin China Manufacturing PMI PMI arrived at 50.9 vs 51.5 in January

Earlier in the day, risks benefited from the hopes of faster economic recovery as the US Food and Drug Administration’s (FDA) approval of Johnson and Johnson’s one-shot coronavirus (COVID-19) vaccine. Also favoring the economic optimism could be chattering surrounding the UK’s five billion aid to the British businesses and the US $1.9 trillion covid aid package that reached the Senate last week.

It should, however, be noted that Auckland’s seven-day lockdown and China’s downbeat NBS Manufacturing PMI tested the bulls.

Against this backdrop, S&P 500 Futures managed to bounce off a monthly low, currently up 1.0% whereas the US Dollar index (DXY) drops 0.20% by press time.

Looking forward, the US ISM Manufacturing PMI for February will be the key amid recently downbeat PMIs from China. It should also be noted that any more surprise bond-buying by the Reserve Bank of Australia (RBA) may push the Reserve Bank of New Zealand (RBNZ), due to the proximity in trades, towards any bearish move, which in turn should be watched carefully.

Read: US ISM Manufacturing PMI February Preview: Will business catch up with consumers?

Technical analysis

Unless breaking a confluence of 50-day EMA and an ascending trend line from December 21, near 0.7190, NZD/USD sellers are less likely to return to the desk.