NZD/USD plunges below 0.6400 and approaches 0.6300, spurred by upbeat US data

• US ISM Non-Manufacturing PMI surprised to the upside, weighing on the NZD/USD.
• An absent New Zealand docket would keep the NZD leaning on investors’ mood.
• NZD/USD Price Analysis: Upward biased, but a pullback to the 200-DMA is on the cards.

The New Zealand Dollar (NZD) tumbles from three-month highs around 0.6442 vs. the US Dollar (USD) after the release of positive US economic data, despite last week’s dovish speech by the Federal Reserve Chair, Jerome Powell. Therefore, the NZD/USD is trading at 0.6317, below its opening price by 1.33%.

Sentiment remains sour, following goodish US data

US equities remain depressed due to sentiment turning sour. The Institute for Supply Management (ISM) reported that the ISM Non-Manufacturing PMI for November smashed expectations e 53.3 estimates, coming at 56.5 while showing that the price index subcomponent added to inflationary pressures in the US. At the same time, the US Factor Orders for November jumped 1%, vs. the 0.7% consensus, above September’s data.

Elsewhere, the Federal Reserve (Fed) Chair Jerome Powell, in last week’s speech saying that moderating interest rate hikes could happen as soon as December, plunged the USD. Nevertheless, last Friday’s US Nonfarm Payrolls report cemented the case for additional action by the Federal Reserve. The US economy added 263K new jobs to the economy, beating the consensus of 200K, while the Average Hourly Earnings jumped by 5.1% YoY, above 4.9% forecasts.

On the New Zealand front, the lack of economic data revealed during the week, with only the release of the Electronic Retail Card Spending and Manufacturing Sales, would lean on the dynamics of the US Dollar and market sentiment.

NZD/USD Price Analysis: Technical outlook

The NZD/USD daily chart depicts the major as upward biased as long as it stays above the 200-day Exponential Moving Average (EMA) at 0.6234.OF note, price action is registering a series of successive higher highs, while the Rate of Change (RoC) didn’t, opening the door for a correction. At the same time the Relative Strength Index (RSI) exited from overbought conditions, suggesting that buying pressure is fading.

The NZD/USD key support levels lie at 0.6300, followed by the 200-day EMA at 0.6234 and the 0.6200 figure. On the flip side, the NZD/USD first resistance would be the 0.6400 mark, followed by 0.6442, ahead of the 0.6300 psychological level.