At the start of the new week, NZD/USD is trading in a narrow range near the November high recorded on Friday, consolidating the recent strong rally. Spot prices are holding steady below the 0.5750 level and show little reaction to the disappointing news from China.

Specifically, the Manufacturing PMI in China from RatingDog unexpectedly fell to 49.9 in November from 50.6 in October. This followed official PMI data released over the weekend, showing declining activity in China's manufacturing sector for the eighth consecutive month, while the services sector is experiencing a contraction for the first time in nearly three years, dropping to its lowest level since December 2022.

Nevertheless, the market responded cautiously, as easing trade tensions and new government stimulus measures to support consumers in the world's second-largest economy have slightly reduced the pressure. In addition, hawkish forecasts from the Reserve Bank of New Zealand regarding future monetary policy continue to support the New Zealand dollar. The overall trend of U.S. dollar selling also provides a supportive backdrop for NZD/USD.

Last week, the RBNZ fully priced in a 25-basis-point rate cut and announced the end of its easing cycle. At the same time, traders assign more than an 85% probability to a December rate cut by the U.S. Federal Reserve. This, combined with bullish sentiment, weakens the dollar as a safe-haven currency relative to the higher-risk New Zealand dollar, supporting the prospects for further NZD/USD gains.

From a technical perspective, daily chart oscillators are mixed, but it is worth noting that the Relative Strength Index (RSI) has moved into positive territory, confirming the likelihood of further upside. Prices have also broken above the 50-day SMA, targeting a move above 0.5750 and the next round level at 0.5800, with a minor obstacle near 0.5790.

Support is at the round level of 0.5700. If this level fails, prices could accelerate downward toward 0.5600, with additional support at the 9-day EMA and then the 20-day SMA.