NZD/USD extends the bounce towards 0.7200 on solid China services

Having found fresh buyers near 0.7160 region in early trades, the NZD/USD pair staged a minor comeback, now extending the bounce towards 0.7180 levels, in response to a much stronger-than expected China’s Caixin services PMI report.

NZD/USD eyes NZ GDT price index

The Kiwi is seen extending the bids to regain 0.72 handle, as the bulls cheer upbeat Chinese services PMI data published by Caixin, which expanded at the quickest pace in six months.

China’s Caixin Services PMI rises to 6-month highs in Aug, a big beat on expectations

The latest China’s non-manufacturing PMI adds to the solid manufacturing PMI report, signaling a gradual upturn in New Zealand’s top trading partner’s, China, economy. China's August Caixin PMI unexpectedly rises, strongest since Feb

Moreover, subdued trading activity seen around the US dollar against its main competitors also helps underpin the sentiment around the NZD/USD pair.

However, it remains to be seen if the spot can reclaim 0.72 handle ahead of the NZ GDT price index data, as persisting risk-off trades amid renewed North Korea tensions continue to restrict the upside in the higher-yielding currency NZD.

NZD/USD Levels to consider                                                                              

NZD/USD remains below 0.7200 (natural resistance), with 0.7155 (200-DMA) still guarding 0.7100 (round figure) and a break back below 0.7056 (June lows) are key near-term downside areas. To the topside, a test of 0.7241/42 (20 & 100-DMA) due on the cards, which could open doors towards 0.7300 (Aug 29 high).