NZD/USD sags as Caixin PMI slips, New Zealand Treasury highlights spare capacity

• The Kiwi is weakening on softer Asia data.
• A thin macro schedule for the week heading into NFP Friday.

The Kiwi is subdued in Monday trading, testing closer to Friday's low of 0.7218.

The NZD/USD pair heads into the new week fighting the slide, with the Chinese Caixin Services PMI slipping to 54.2, missing the forecast 54.3 after the previous period's 54.7.

Adding to the Kiwi's woes is the New Zealand Treasury's Monthly Economic Indicators (MEI); while the data is mainly positive, several caveats were underlined that hamper any real breakout potential for the NZD/USD pair. The Treasury noted that despite unemployment continuing to drop (down to 4.5% in December) and consumption spending ticking upwards, under-employment remains stable and wage growth remains restrained, highlighting the spare capacity still running through the New Zealand economy.

Little remains of impactful economic data for the NZD until Thursday's Electronic Card Retail Sales figures at 21:45 GMT, when markets will be knocking on another Non-Farm Payrolls Friday showing for the US Dollar.

NZD/USD Technicals

The pair is fighting to stay in bullish territory, trading just above the 200-day SMA currently at 0.7175 after slipping from the soft double-top on Daily candles from the 0.7435 region; The H4 chart shows a possible floor forming from 0.7175, while intraday support is priced in at 0.7210 and 0.7185, with resistance at 0.7275 and the 0.7300 major handle.