NZD/USD strongest since May 2015 on Fonterra news, China data

Wednesday’s rally in NZD/USD gained extra legs in the Asian session, with the rate now printing fresh multi-month tops at 0.7548 levels.

NZD/USD trades above all major DMAs

The bulls are on a roll higher for the second straight session, as they digest the dovish Fed outcome, while at the same time remain lifted on the back of strong Chinese industrial profits data and Fonterra’s announcement. Fonterra, New Zealand’s dairy giant announced that it made upward revision to its farmgate milk prices. Meanwhile, China June Industrial profits climbed +19.1% y/y versus +16.7% last.

Moreover, ongoing broad USD weakness, in the wake of softer language read in FOMC statement, weighed heavily on Treasury yields, which knocked-off the US dollar to fresh thirteen-month lows against its main competitors.

Also, the latest NZ trade balance data came in upbeat, which also added to the upside in the Kiwi. Looking ahead, NZD/USD will continue to closely track USD dynamics, as markets eagerly await the US durable goods data for fresh momentum.

NZD/USD Levels to consider                                                                              

NZD/USD took-out 0.7550, with a test of 0.7600 (round number) due on the cards, which could open doors towards 0.7634 (May 2015 high). To the downside lies 0.7500 (psychological levels) still guarding 0.7476 (5-DMA) and a break back below 0.7426 (10-DMA) are key near-term downside areas.