- US Dollar Index finds support near 95, starts recovering daily losses.
- GDT price index declines 1.7%.
The NZD/USD pair advanced to a daily high at 0.6755 but retraced its gains in the NA session and was last seen trading at 0.6734, where it was virtually unchanged on the day.
Earlier today, a sharp fall seen in the USD/CNY pair allowed the NZD to gather strength against its rivals. However, the bi-weekly Global Daily Trade from New Zealand that was released in the last hour showed a 1.7% decline in the GDT price index to match the previous reading and weighed on the kiwi.
On the other hand, the IBD/TIPP Economic Optimism Index in the U.S. improved to 58 in August from 56.4 in July and surpassed the analysts’ estimate of 57.2. After easing down to the 95 area in the early NA session, the US Dollar Index took advantage of the upbeat data and started recovering its gains. At the moment, the DXY is still down 0.2% on the day at 95.15.
Later in the session, the Fed is going to release the consumer credit change figures. During the Asian session on Wednesday, the RBNZ is going to publish the Inflation Expectations for the second quarter, which could be the next catalyst for the NZD.
Technical outlook
The RSI indicator on the daily chart continues to stay below the 50 mark, suggesting that sellers remain in control. On the upside, the pair could face the initial resistance at 0.6750/55 (daily high/Jul. 6 high) ahead of 0.6820 (50-DMA) and 0.6860 (Jul. 9 high). Supports could be seen at 0.6685 (Jul. 3/Jul. 2 low), 0.6575 (Mar. 16, 2016, low) and 0.6500 (psychological level).
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