New Zealand Dollar slips after China’s RatingDog Manufacturing PMI release

• 52.0 was China’s September RatingDog Manufacturing PMI reading, down from 52.1 in August. The New Zealand Dollar remains lower following the release.
• At 49.3 in October, China’s NBS Manufacturing PMI slipped into contraction and fell short of the 50.0 forecast.
• Strong US economic releases and elevated expectations of a Fed rate hike could underpin the US Dollar.

NZD/USD is trading near 0.5620. During Monday’s Asian session, the pair extends its decline for a second consecutive day. Weighing on the New Zealand Dollar (NZD) is the latest RatingDog Manufacturing Purchasing Managers’ Index (PMI) from China, a close trading partner of New Zealand. The index slipped from 52.1 in August to 52.0 in September, against a market forecast of 51.6.

An October Manufacturing PMI reading of 49.3 was reported by China’s National Bureau of Statistics (NBS) on Saturday, down from the previous 50.1. This undershot the market consensus of 50.0 for the month. The NBS Non-Manufacturing PMI also weakened, falling from September’s 50.2 to 49.7 in October.

Reduced safe-haven demand is weighing on the US Dollar (USD), potentially limiting further losses in NZD/USD. Diplomatic efforts to resolve the Middle East conflict continue, although concerns persist over renewed US military action against Iran. For a third consecutive day, Qatari and Iranian officials held talks aimed at securing an agreement to end the war before the US midterm elections.

Rising expectations of a Federal Reserve rate hike could nevertheless help the US Dollar recover. Recent US macroeconomic releases have signalled economic resilience and persistent inflation, reinforcing those expectations. The CME FedWatch Tool shows traders assigning roughly a 75% probability to a December rate increase.

The US Nonfarm Payrolls (NFP) report and ISM manufacturing and services releases are among the key events traders are awaiting. Several Federal Reserve officials are also due to speak during the week. Their comments are expected to provide additional direction on the central bank’s monetary policy trajectory.

Nine-Day EMA: NZD/USD Stays Below Key Average in Technical Analysis

At 0.5620 on the daily chart, NZD/USD retains a bearish bias. Spot remains beneath both the short-term nine-period Exponential Moving Average (EMA) and the medium-term 50-period EMA, leaving the pair under pressure from successive overhead resistance levels. The 14-day Relative Strength Index (RSI) has slipped below its midpoint to around 40. This suggests recent rebounds lack momentum, even as the broader FXS Fed Sentiment Index shows some stabilisation.

The nine-period EMA near 0.5644 provides the first upside resistance, followed by a firmer obstacle at the 50-period EMA around 0.5701. Together, these averages are currently limiting recovery attempts. The available dataset provides no clear technical support levels. Traders may therefore continue selling into rallies towards the EMA cluster, with the prevailing structure pointing to further downside risk unless NZD/USD recovers above these moving averages and sustains that position.

(The technical analysis of this story was written with the help of an AI tool. Know more.)