NZD/USD breaks higher to regain 0.6900 on upbeat fundamentals
- The rise in NZ dairy prices offsets risk-aversion.
- US ADP jobs on tap.
The bid tone around the NZD keeps growing bigger, as we progress towards the European opening bells, now pushing the NZD/USD pair above 0.69 handle.
NZD/USD headed to test Friday’s high at 0.6912
The spot replicated the moves seen in the Asian session a day before, mainly driven better macro news, which offset persisting risk-off sentiment. The rise in New Zealand’s dairy prices combined with better Chinese services PMI continue to boost the sentiment around the Kiwi.
Meanwhile, broad-based US dollar weakness on the back of the renewed weakness seen in Treasury yields across the curve also added to the upbeat tone in the major. The greenback extended losses against its main competitors over the last hours, as investors continue to fret over a possible US government shutdown as early as this Friday.
Focus now shifts towards the key US employment data due out later on Wednesday for fresh incentives while the sentiment on the Wall Street could also have a strong bearing on the higher-yielding NZD.
NZD/USD Levels to consider
The spot trades near 0.6900 (round number), below which 0.6877/75 (10 & 5-DMA) and 0.6823 (classic S2 & Fib S3) are key near-term downside areas. To the topside, a break above 0.6931 (50-DMA) could open doors towards 0.6981 (Nov 9 tops).