NZD/USD picks up to test resistance at the 0.6130 area

• The Kiwi finds buyers at 0.6100 although it remains capped below 1.6130 so far.
• Strong US data and concerns about China are weighing on the NZD.
• US Dollar losses are likely to remain limited ahead of US CPI and the Fed’s meeting.

US Dollar weakness, however, is likely to remain limited after US NFP data from Friday highlighted the resilience of the US labour market and curbed hopes of Fed cuts in early 2024.

Data released over the weekend showed that China’s Consumer Prices grew at their slowest pace in three years, adding concerns about the frail momentum of the world’s second-largest economy and hurting the China-proxy NZD.

The calendar is light today with traders awaiting Tuesday’s US CPI data and Wednesday’s Fed’s monetary policy decision to shed some more light on the bank’s next monetary policy steps.

Technical indicators are turning lower with price action below the 4h 50 SMA and hovering above the 100 SMA. Support at 0.6130 is capping bulls so far, closing the path towards 0.6190 and 0.6225.

Failure to regain 0.6130 would increase pressure towards 0.6050 and 0.6000.

Technical levels to watch