- NZD/USD recovers to mid-0.67s on Tuesday.
- US Dollar Index remains in the red ahead of data.
- GDT auction outcome will be the next catalyst.
The NZD/USD pair, which lost around 80 pips on Monday, is taking advantage of a weaker greenback to stage a modest recovery on Tuesday. At the moment, the pair is trading around 15 pips below its daily high of 0.6750 and is still up 0.3% on the day.
Earlier today, a sharp upsurge witnessed in the AUD/USD pair amid optimistic comments from the RBA provided a boost to the positively-correlated NZD/USD pair. Although the RBA left the policy rate unchanged at 1.5%, the policy statement highlighted that the bank was comfortable with the AUD’s current level and the wage growth was expected to pick up momentum in the short-term.
On the other hand, the greenback erased yesterday’s gains with the US Dollar Index dipping back below the 94.50 mark on Tuesday, allowing the pair to stick to its daily gains.
Later in the session, the GDT auction could provide a fresh catalyst for the kiwi. Two weeks ago, the price index showed a 1.2% reduction and a rebound could help the NZD/USD pair extend its upside and vice versa. The economic docket from the United States will feature ISM NY Business Conditions Index, factory orders, and IBD/TIPP Economic Optimism Index.
Technical levels to consider
The pair could face the immediate resistance at 0.6750 (daily high) ahead of 0.6800 (psychological level/10-DMA) and 0.6850 (Jun. 27 high). On the downside, supports align at 0.6685 (daily low/Jul. 2 low), 0.6630 (Mar. 9, 2016, low) and 0.6600 (psychological level).
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