AUD/NZD: Bulls cheer upbeat Aus GDP, China PMI caps upside

The Australian dollar smashes its OZ neighbour in the Asian morning, after the AUD bulls received fresh impetus from upbeat Aus GDP data, while markets digest the latest matching expectations China Caixin manufacturing PMI report.

AUD/NZD hovers around 20-DMA

Currently, the AUD/NZD pair advances +0.25% to 1.0720, reversing a spike to daily highs posted at 1.0732, having rebounded sharply from 1.0650 levels. The cross in the AUD/NZD staged a solid comeback and now extends higher on the bids, taking the positive lead from stronger –than expected Australian GDP figures, while the cross looks to ignore unimpressive Chinese PMI reading.

Australia’s Q1 GDP q/q came in at +1.1% versus +0.8% expected and from +0.7% prior (revised higher from +0.6%). While China Caixin manufacturing PMI for May came out in line with expectations at 49.2, dropping slightly from 49.4 seen in April and hit a fresh three-month low.

Moreover, the New Zealand dollar remains undermined this session, as the bulls shrugged-off upbeat overseas trade index which stood at +4.4% versus +0.9% expected. Markets now await the ISM manufacturing PMI report from the US docket and Fonterra’s dairy auction results due for release later in the NA session for further insights on the cross.

AUD/NZD Levels to watch   

The pair finds the immediate resistance at 1.0800 (round number) above which gains could be extended to the next hurdle located at 1.0888 (200-DMA). On the flip side, the immediate support located at 1.0650/48 (Daily low). Selling pressure is likely to intensify below the last, dragging the Aussie 1.0617/00 (Daily S1/ round figure).