NZD/USD Remains Rangebound, Eyes On China Caixin Mfg Shortly

The NZD/USD experienced a volatile session on Friday, although managed to close up 0.16% at 0.6092, while the BBDXY finished the session down 0.14% at 1,269.54. Initially falling to its lowest level since mid-May during the Asian session before rebounding strongly.

• NZD/USD saw a fresh wave of selling pressure early in the day, dipping below all major EMAs to a low of 0.6058 before recovering following softer US PCE inflation data. Despite the move, daily ranges were still tight as we traded in about a 40-pip range.
• The US Dollar climbed to a two-month peak due to a hawkish Fed outlook and rising Treasury yields but retreated as inflation data increased Fed rate-cut prospects.
• Speculative net positions for the NZD have risen significantly to 26.6K from 20.3K, indicating growing investor confidence and increased market activity. This trend suggests traders are holding more long position
• Immediate support is seen at 0.6058 (June 28 lows), with a break potentially targeting 0.6038 (Feb 5 lows). Resistance is at 0.6116 (20-day EMA), with a breach opening a move towards 0.6148 (June 20 High).
• The US-NZ 2yr swap is up 5bps to -28bps.
• Expiries: No large nearby strikes Mon, upcoming notable strikes: 0.6130 (NZD720.7m July 4)
• Looking ahead, NZD will be influenced by Monday’s Caixin Manufacturing PMI data for China at 11:45 AEST , while locally we have Filled Jobs at 8:45 AEST