FxWirePro: NZD/USD closes above 200-month MA, outlook bullish

NZD/USD chart - Trading View 

Spot Analysis:

NZD/USD was trading 0.08% higher on the day at 0.7275 at around 04:50 GMT

Previous Session's High/ Low: 0.7283/ 0.7231

Previous Week's High/ Low: 0.7316/ 0.7158

Fundamental Overview:

Data released earlier today showed China Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) rose to 52.0 in May, beating expectations for an unchanged 51.9 reading. 

This was the highest level since December, reinstalling risk-on sentiment in the markets and thereby supporting the antipodeans. 

US dollar index (DXY) remains on the back foot for the second consecutive day on early Tuesday after closing with a Gravestone Doji on Friday's trade.

Focus now remains on the key US PMI data ahead of Friday’s US Nonfarm Payrolls (NFP). US ISM Manufacturing PMI is likely to stay at 60.7 level.

Technical Analysis:

- GMMA indicator shows major and minor trend are strongly bullish

- Price action is above cloud and major moving averages

- Bearish divergence on RSI on the daily charts keeps scope for downside

- Oscillators are bullish, RSI is above 50 and biased higher

Major Support and Resistance Levels:

Support - 0.7225 (21-EMA), 0.72 (200-month MA), 0.7187 (55-EMA), 0.7128 (110-EMA)

Resistance - 0.73 (Psychological mark), 0.7312 (Upper BB), 0.74, 0.7464 (Yearly high)

Summary: NZD/USD is set to extend upside. Pullbacks have held above 55-EMA support. The pair is consolidating break above 200-month MA. Focus on US PMI data for impetus, any disappointment will prove counterproductive for the US dollar and could add to the NZD/USD upside.