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Off 1% in Early Trade, Amid Broad USD Rebound

NZD

NZD/USD prints $0.5870, down ~1% from Friday's closing levels.

  • The pair rose ~2.7% on Friday amid broad USD weakness. The NZD saw strong spill over gains from lower USD/CNH levels amid on-going speculation of a potential shift in China's zero-covid policy stance.
  • However, Chinese health authorities stated on Saturday "Previous practices have proved our prevention and control plans and a series of strategic measures are completely correct", dashing hopes of an imminent policy change. In thin liquidity the pair printed a low of $0.5847 before recovering to current levels.
  • NZD/USD remains in a technical downtrend, despite the strong price action seen on Friday. Bears target the 50-day EMA at $0.5851, then the 20-day EMA at $0.5787. Bulls look to break 3rd Nov high at $0.5942 to then target 100-day EMA at $0.6011.
  • In the local data calendar this week, it is mostly second tier data. The main focus is likely to be on 4Q Inflation expectations, which print tomorrow. Otherwise, the focus will remain on broader risk appetite, particularly in relation to China covid developments.

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