NZD/USD: Bulls offered respite by upbeat China services PMI

The recovery in the US dollar across the board appears to gain traction last hour, triggering a fresh sell-off in NZD/USD from just a thread line short of 0.7000 levels, only to find fresh bids near 0.6970 region following the release of better-than expected Chinese services PMI data. China’s services PMI came in at 53.4 versus 53.3 expected and higher from November’s 53.1 print.

Currently, the NZD/USD pair regains poise and rises +0.19% to 0.6982, recovering from a dip to 0.6970 region. The sell-off witnessed earlier on the day could be also attributed to negative oil prices and mixed performance on the Asian indices, which weighed somewhat on the higher-yielding NZD.

However, it remains to be seen whether the Kiwi can sustain the Chinese data-led recovery mode, as the USD picks-up in wake of hawkish Fed minutes and ahead of the US jobs data due later in the NA session.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7000 (round figure), above which it could extend gains to 0.7032 (daily R2) and from there to 0.7067 (Dec 16 high). To the downside immediate support might be located at 0.6947 (5-DMA) and from there to at 0.6914 (daily S1), below which 0.6859 (multi-month low) would be tested.