NZD/USD: Recovery remains intact, 0.6700/05 is the level to beat for buyers

• Meek details of the US GDP, positive outcome of China’s industrial profits help Kiwi to extend the previous recovery.
• 0.6700/0.6705 resistance-area challenge buyers targeting 200-day SMA.

NZD/USD holds the recent recovery intact as it trades near 0.6660 at the start of Asian trading on Monday. The Kiwi pair recovered previous losses as investors trimmed greenback gains after the US GDP details showed weak consumer spending. Also, the recent increase in China’s industrial profits adds strength into the antipodeans at the week-start.

The US Dollar (USD) couldn’t take benefit of the upbeat gross domestic product (GDP) growth for Q1 2019 as detailed showed consumer spending dipped during the first quarter of the year. 

Adding to the pullback could be upbeat prints of China’s industrial profits. As per the latest release from China's National Bureau of Statistics, March month profit growth surged to the highest since July 2018 with +13.9% YoY increase.

China being the world’s largest commodity user, positive data from the dragon nation plays well for the commodity-linked currencies like the New Zealand Dollar (NZD).

Looking forward, no major economic data is up for release during the day except the US personal spending and income figures. With the current spending data scheduled to publish February readings together with March ones, January expansion of 0.1% is the previous benchmark to watch. Also, personal income for February grew +0.2% and is expected to rise by +0.4% in March.

Technical Analysis

Not only lows of January 08 and 22, but a descending trend-line from March 26 also highlights the importance of 0.6700/05 resistance-area, a break of which can escalate the recovery in direction to 200-day simple moving average (SMA) figure of 0.6730.

Meanwhile 0.6650, 0.6630 and 0.6580 are likely nearby supports for the traders to watch ahead of aiming 0.6500 if holding short positions.