- Subdued trading action dominates markets on July 4th.
- US Dollar Index recovers toward mid-94s.
The NZD/USD pair is trading in a tight 30-pip range on Wednesday as the volume thins out with American traders enjoying the Independence Day holiday. After touching a daily high at 0.6780 earlier today, the NZD/USD pair retraced its upside and eased toward the 0.6760 handle to turn flat on the day.
Amid a lack of macroeconomic data releases in the NA session, the pair is likely to fluctuate in its daily range. The US Dollar Index, which dropped to a daily low of 94.13, was able to stage a technical correction and was last seen at 94.40, where it was up only 0.05% on the day.
On Thursday, the FOMC is going to release the minutes of its 13 June meeting and investors will be looking for clues regarding another rate hike in September. Standard Chartered analysts think that the statement will be providing details on the Committee’s assessment of risks to real activity and inflation from trade tensions and on the near-term inflation trajectory and possible inflation ‘overshoot’.
Furthermore, the ADP employment change, which is expected to rise to 190K in June from 178K in May, will be critical ahead of Friday’s nonfarm employment report.
Technical levels to consider
The pair could face the initial resistance at 0.6795/0.6800 (10-DMA/psychological level) ahead of 0.6850 (Jun. 27 high) and 0.6920 (50-DMA). On the downside, supports align at 0.6750 (daily low), 0.6685 (Jul. 3 low) and 0.6600 (psychological level).
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