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   “¢   The USD clings to gains near 2-year tops post-US macro data.
   “¢   Highly oversold conditions prompt some short-covering move.
   “¢   Traders now eye NZ trade balance data for some fresh impetus.

The NZD/USD pair reversed a mid-European session dip to near six-month lows, with bulls now making a fresh attempt to build on the momentum beyond the 0.6600 handle.  

Having touched an intraday low level of 0.6580 – the lowest since early Nov. 2018, the pair witnessed a modest short-covering bounce amid near-term oversold conditions and seemed rather unaffected by the prevalent bullish sentiment surrounding the US Dollar.

In fact, the key USD Index held on to its strong daily gains near the 98.00 handle – a level not seen since May 2017, and remained supported by upbeat durable goods orders data for March, though was partly offset by a larger than expected jump in initial weekly jobless claims.

Apart from some near-term profit-taking by bearish traders, the uptick wasn’t backed by any obvious fundamental catalyst and thus lacked any strong follow-through. Hence, it would be prudent to wait for a sustained buying before confirming that the pair might have bottomed out in the near-term.

With today’s US macro data out of the way, market participants now look forward to the release of NZ trade balance data for some impetus. Friday’s key focus, however, will be on the advance US Q1 GDP report, which might influence the near-term price action ahead of the latest FOMC monetary policy update next Wednesday.

Technical levels to watch

Immediate resistance is pegged near the 0.6615-20 region, above which a fresh bout of short-covering could lift the pair further towards the 0.6655-60 supply zone. On the flip side, the 0.6585-80 region now becomes immediate support to defend, which if broken might turn the pair vulnerable to extend the downfall further towards the 0.6520 region en-route the 0.6500 handle.