NZD/USD climbs to 1-month tops, beyond mid-0.6400s

• Upbeat Chinese macro data boosted risk appetite and underpinned the kiwi.
• A subdued USD demand, despite surging US bond yields, remained supportive.
• Traders look forward to the US ISM Manufacturing PMI for a fresh impetus.

The NZD/USD pair continued gaining positive traction through the early European session on Monday and climbed to near one-month tops, around the 0.6465 region in the last hour.

The pair caught some aggressive bids on the first day of a new trading week and finally broke out of its near two-week-old consolidative trading range amid a fresh wave of the global risk aversion trade.

Bulls in control amid risk-on mood

An unexpected jump in China’s manufacturing activity in November helped offset recent concerns over the US-China trade deal and provided a goodish lift to perceived riskier currencies like the kiwi.

In fact, the official data released over the weekend showed that China's manufacturing PMI moved in the expansion territory for the first time since April and rose to 50.2 in November from 49.3 previous.

Moreover, China’s Caixin/Market PMI also bettered market expectations and came in at 51.8 from 51.7 reported last month, which coupled with a subdued US dollar demand remained supportive.

Despite the risk-on mood-led strong upsurge in the US Treasury bond yields, now up around 4% for the day, the USD struggled to attract any meaningful traction and provided an additional boost to the major.

Adding to this, possibilities of some short-term trading stops being triggered on a sustained move beyond the 0.6435 strong horizontal resistance might have also played its part in driving the pair higher.

It will now be interesting to see if the pair is able to capitalize on the positive momentum or runs out of the steam at higher levels as the focus now shifts to the release of the US ISM Manufacturing PMI.

Technical levels to watch