NZD Edges Higher As China Looks To Further Support Property Market

The Kiwi is the top performer G10 currency today, both the NZD and AUD are benefitting from news out of China that local governments will buy unsold homes at distressed levels to support the struggling sector. Further upside could be limited, as the markets awaits US CPI later today.

• NZD/USD is up 0.26% to 0.6057 after earlier breaking above the 100-day EMA, we now have eyes on the 200-day EMA a level we have been below since mid-march. The pair is now trading just below Mar CPI levels when CPI beat estimates coming in at 3.5% vs 3.4%. Buyers are in control with the 14-day RSI ticking back above 60, while the MACD indictor is showing increasing green bars. Levels to watch heading into CPI tonight, a lower read should push the pair above the 0.6083 (Apr 10 - pre–March CPI) and test 0.6100 (round number resistance), with a break here opening at a test of 0.6160 (Feb 9th highs) are bring us back to the average of the past year.
• AUD/NZD is little changed today and now trades at 1.0972, earlier we had AU wage data which was slightly softer than expected but did little to hurt the AUD as both currencies are benefitting from the China property news. The cross has done very little over the past 5 session, trading in just a 40-pip range, the 14-day RSI still holds above 50, although the MACD is showing a slight decline. Looking ahead, tomorrow we have AU Employment data out. Levels to watch are initial support at 1.0963 (20-day EMA), with a break here opening up a retest of 1.0900 (50-day EMA), while initial resistance is 1.1031 (May 7 high).
• NZD/JPY is up 0.34% at 94.806, as the JPY continues to slip with the USDJPY now trading at 156.42. The cross now trades back at levels made on the day of what is widely seen as the first intervention from the BoJ to support the currency, there has been little from BoJ or government officials this week in relation to the currency, compared to weeks prior. Looking ahead, Japan has GDP data out on Thursday, with consensus at -1.2% q/q, down from 0.4% q/q in Q4. Key levels to watch, a break above 95.40, would open up a retest of 2007 levels, while to the downside a break of 94.00 could open a move to 92.60 (20-day EMA)