NZD/USD Heads Higher Aided By China Property News & Softer US Data

The Kiwi finished Wednesday's session as the top performing G10 currency up 1.34% at 0.6122, the USD weakened to a one month low as the market digested softer US data, US CPI was broadly in line with expectations, while retail sales had their poorest performance in 3 months in April, with weakness evident across the board. The NZD is also benefitting from China housing news released on Wednesday, while traders look to be positioning for the RBNZ meeting next week.

• The NZD/USD finished the session stronger on the back of broad USD weakness, the pair has broken above the 200-day EMA, a level we have traded below since March 14th. We now comfortably sit above all moving averages, 14-day RSI ticked up to 66, while the MACD indictor is showing increasing green bars, indicating buyers are well in control.
• As trading gets underway on Thursday, we have opened a touch lower, down about 0.10% at 0.6118.
• Key levels to watch: Initial resistance of 0.6158 (Feb 9 highs) above here we target the 0.6200/20 (round number/ March 8 higher), failure to hold above the 200-day EMA at 0.6070, would open moves to test the 100-day EMA at 0.6044.
• The US-NZ 2y is down 2bps at -18bps
• Option expiries: 0.5885 (NZD950m), 0.6000 (NZD729.3m), 0.5890 (NZD522m) 16th NY Cut while notable upcoming strikes are 0.5880 (NZD1.25b May 17), 0.6100 (NZD531.5m May 20), 0.5950 (NZD495m May 17)
• Looking ahead: Today we have Non Resident Bond Holdings