NZD/USD bounces-back to 0.7100 on solid China services

• DXY pauses rebound.
• Underpinned by upbeat Chinese data.
• US jobs data eyed.

The NZD/USD pair staged a minor comeback from near 0.7075 low, as the bulls derived the much-needed support from China’s Caixin Dec services PMI release, which surprised markets to the upside.

NZD/USD: Eyes on 200-DMA at 0.7139

The Kiwi erased losses and swung back into the positive territory, as a solid upturn seen in the Chinese services activity lifted the sentiment around the NZD. China is New Zealand’s top trading partner. A positive Chinese services PMI print added to the optimism generated following the release of upbeat Chinese Caixin manufacturing PMI released yesterday.

Moreover, with oil prices sit at more-than-two-year tops and risk-on rally seen in the Asian equities, the higher-yielding currency takes advantage of a better risk environment. Thus, reversing the move lower near 10-DMA of 0.7070.

However, further recovery gains appear limited, as the US dollar remains broadly underpinned by stronger US factories data and hawkish FOMC minutes, which backed the case for three rates hike this year.   

Looking ahead, the USD price-action and broader market sentiment will continue to have a significant influence on the pair, as investors gear up for the US ADP jobs and unemployment claims data slated for release in the NA session.

NZD/USD Technicals

The pair finds next resistances at 0.7107 (NY top), at 0.7138 (200-DMA), 0.7150 (psychological levels). Meanwhile, the supports are located at 0.7070 (10-DMA), 0.7025 (100-DMA) and 0.7000 (key support).