FxWirePro: Kiwi dollar gains on positive notes from China but long term downtrend to resume

Kiwi dollar gained against U.S. dollar on the back of upbeat manufacturing numbers of China (manufacturing PMI increased from previous flash of 47.0 to the current flash at 47.2). Australia and New Zealand are the two pacific countries that have huge trade exposure with China.

We kept stating already in our previous posts, NZDUSD streak of slumps to persist further in long term but this is for trend changing mood in near term basis as all news are favoring Kiwi dollar. With Fed's delay and improved Fonterra's numbers from New Zealand side has added little impetus to the recovery in the pair. The pair is currently trading at two weeks high of 0.6410 levels.

But we cannot disregard continual bearish trend also as the pair has been tumbling non-stop from the peaks in last April at 0.7736 levels to evidence the huge losses on weekly charts. The pair currently held strong supports at 0.6200 levels from one and half months.

You can observe on the monthly charts for the historical evidence as to how the pair has behaved whenever RSI and stochastic curves have simultaneously reached oversold zone. Kiwi dollar after continues losing streak that has begun from mid April, it is now making an attempt of recovery a bit as both RSI and stochastic oscillators signaling buying sentiments in oversold zone.

Meanwhile, investors eyed upcoming reports on U.S. jobless claims and manufacturing activity due later in the day, amid growing uncertainty over whether or not the Federal Reserve will raise interest rates before the end of the year. The greenback strengthened after payroll processing firm ADP reported on Wednesday that U.S.non-farm employment rose by 200,000 this month, above expectations for an increase of 194,000.

To conclude, bounces are expected in short-intermediate term but we undoubtedly foresee long term trend has been bearish as this pair has been unable to hold onto 6 year's lows due to various fundamental reasons.