- NZD/USD trades near the upper-limit of its 2-week range.
- US Dollar Index loses traction ahead of American session.
- Focus shifts to CB Consumer Confidence Index data from US.
The rebound witnessed in the US Dollar Index during the Asian trading hours and the heavy selling pressure surrounding crude oil weighed on the NZD/USD pair on Tuesday and dragged it below the 0.60 mark. However, the greenback struggled to preserve its strength ahead of the American session and allowed the pair to reverse its direction. As of writing, the pair was up 0.35% on a daily basis at 0.6066.
USD remains on the back foot on Tuesday
In the absence of significant macroeconomic data releases, the risk sentiment and the USD’s performance remained as the sole drivers of the pair’s action. Although the market mood turned sour in Asia amid the relentless drop in crude oil prices, optimism about major European economies easing coronavirus-related restrictions helped risk-on flows to start dominating markets. At the moment, major European equity indexes are rising between 1.5% and 1.7%.
On the other hand, following a recovery earlier in the day, the US Dollar Index lost its traction and stretched lower toward the mid-99s ahead of the key macroeconomic data releases from the US.
Goods Trade Balance, Richmond Fed Manufacturing Index and the Conference Board’s Consumer Confidence Index will be watched closely by the market participants. During the Asian session on Wednesday, Roy Morgan Consumer Confidence and Trade Balance data will be released from New Zealand.
Technical levels to watch for
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