NZD/USD turns positive, back above 50-DMA

Broad based USD weakness helped NZD/USD pair reverse trend and move back above 50-DMA level of 0.7246. The spot was last seen trading around 0.7260.

US treasury yields retreat

The American dollar is under pressure as the treasury yields in the US dropped. The 2-yr yield, which is more sensitive to short-term interest rate expectations, dropped two basis points. The 5-yr and 10-yr yield shed one basis point each.

Consequently, the NZD/USD pair recovered from the session low of 0.7229 levels. China Caixin PMI matched estimates but received a lukewarm response from the markets. The focus now shifts to US personal spending and income report due later today.

NZD/USD Technical Levels

On the higher side, a move back above 5-DMA of 0.7274 would open doors for a revisit to 0.73, above which major hurdle is seen at 0.7370 (Sep 23 high). Breach of 0.72 levels could force unwinding of long trades and expose support at 0.71 levels, given the level has acted as a strong support since mid August. A violation at 0.71 (zero figure) could yield 0.7054 (Apr 19 high).