The NZD is the strongest and the USD is the weakest as the North American session begins. The NZD got a boost from the better China data which showed that growth increased at its fastest pace in 8 months. The manufacturing PMI in China rose to 52.6 which was the highest level in a decade.
The news sent the USDCNH through its 200 day MA at 0.69127 (higher CNH). On Monday, the price tested its 100 day moving average near the 6.99029 level and found willing sellers against the worst defining level. The high price reached 6.98914 before rotating to the downside in closing lower on Tuesday.
Meanwhile for the NZDUSD, it surged above its 200 day MA and ran. Looking at the hourly chart below, the price is approaching the 38.2% retracement of the move down from the February high. That level comes in at 0.62855. The price high just reached 0.62748. A swing area between 0.62521 and 0.62688 is now close intraday support (see yellow area and the green numbered circles in the chart below).
Recall the RBNZ raise rates by 50 basis points back on February 21. The central bank expected that inflationary pressures remain high as the country rebuilt from the devastating cyclone, and expected further rate hikes going forward. The price of the NZDUSD consolidated in a sideways range below the 200 hour MA (and above and below its 100 hour moving average – blue line in the chart below), until breaking lower and running away from the 100 hour moving average and 100 day MA on Friday (lower blue line in the chart below).
Today, the pair moved above a cluster of MAs including the 100/200 hour MAs and the 200 and 100 day MAs. Those breaks tilted the bias of the upside and the bullish one to the upside was in full force.
Later today the US PMI data will be released (S&P Global and the ISM data at 9:45 AM ET and 10 AM ET).
The EURUSD is also making a break for it to the upside. The EURUSD is up nearly 1.0% at the start of the US session helped by higher than expected CPI data out of Germany (arrows at 0.8% versus 0.5% expected). The manufacturing PMI data showed Italy and Spain was better and back above 50 level. Germany, France and UK stayed below the 50 level. Nagel had more hawkish comments.
The next target for the EURUSD is a swing area between 1.0707 1.0724. The 38.2% retracement of the February trading range comes in at 1.07229 near the height of that range. Getting above that retracement level is another key target if the buyers are to take more control.
Meanwhile in the UK, BOE Bailey was more neutral in his speech today. That has limited the upside for the GBPUSD.
IN Australia, the AUDUSD first moved lower after lower CPI data (YoY 7.4% vs 8.1% est and 8.4% last month), but then rebounded off the China news.
A snapshot of other markets at the start of the North American session shows:
- spot gold is trading up $14.73 or 0.81% at $1841.42.
- Spot silver is up $0.25 or 1.20% at $21.14
- WTI crude oil is trading at $76.49. The private data showed another big building crude stocks:
The expectations are for crude stocks to show an increase of about 0.5 million when it is released at 10:30 AM ET.
- Bitcoin is trading at $23,716
In the premarket for US stocks, the major indices are trading higher after declines yesterday:
- Dow Industrial Average up 62.3 points after yesterday's -232.39 point fall
- S&P index is up 7.1 points after yesterday's -12.07 point fall
- NASDAQ index is up 36 points after yesterday's -11.44 point fall
in the European equity markets:
- German DAX is up 0.6%
- France's CAC is up 0.63%
- UK's FTSE 100 is up 0.9%
- Spain's Ibex is changed
in the Asian Pacific markets today:
China’s Shanghai Composite rose 1.0%
Hong Kong’s Hang Seng surged 4.21%
Australia’s S&P/ASX 200 fell -0.1%
- Japan's Nikkei 225 rose 0.26%
In the US debt market, the yields are mixed with a tilt to more negative yield move. The 2 year is higher, the 30 year is lower.
In the European debt market, yields are mostly higher with the UK 10 year bucking the trend (it is lower) after Bailey's more neutral comments today:
