NEW ZEALAND: Manufacturing PMI Slumps In may, Giving Back 2025 Gains

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.95 - High Apr 7
• PRICE: 139.35 @ 16:43 GMT May 13
• SUP 1: 139.01 - 1.0% 10-dma envelope
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs are holding the bulk of the recent strong bullish reversal from early April, rejecting any test of fresh cycle lows for the M5 contract. This defies the bearish momentum studies drawn on the longer-term chart, clearing moving-average resistance to print 142.40 at the new upper level. To the downside, sights are on 136.57, a Fibonacci projection. 144.48 is the medium-term target on any recovery.

The NZD had a range Overnight of 0.5883 - 0.5942, Asia is opening around 0.5940. Risk has continued to bounce overnight, the NZD has benefited from this and just like the AUD is seen as a good proxy for China.

• Price action in the USD was very interesting in that it initially benefitted from the rise in stocks and the better risk sentiment. Overnight though the USD has given back most of those gains.
• After initially falling when risk spiked, the NZD found very good demand sub 0.5900 and has since clawed back all its losses.
• “China-proxy currencies Aussie and Kiwi should continue to outperform safe haven currencies yen and Swiss franc as the US and China have taken significant steps to de-escalate their trade war,” according to Brown Brothers Harriman via BBG.
• The support back towards 0.5800 held very well, and while this continues to hold expect buyers to return on dips. The first target is the highs just above 0.6000, a break here and the move higher can start to gain momentum.
• CFTC Data showed little movement, with Asset managers adding very slightly to their shorts and the leveraged community slightly reducing their own short.

• Data/Event : NZ Apr Card Spending, Mar Net Migration

  Fig 1: NZD/USD Spot Daily Chart

  

  Source: MNI - Market News/Bloomberg

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