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  • NZD/USD struggles to make a decisive move in either direction.
  • US Dollar Index stays below 90.00 on Tuesday.
  • US ISM Manufacturing PMI is expected to stay unchanged at 60.7 in May.

The NZD/USD pair closed flat on Monday and continues to trade in a relatively tight range on Tuesday. As of writing, the pair, which touched a daily high of 0.7289, was losing 0.1% on the day at 0.7260.

The only data from New Zealand showed on Tuesday that Building Permits rose by 4.8% in April. Although this reading came in much better than March’s print of -19.2%, it failed to trigger a noticeable market reaction.

DXY stays calm ahead of key US data

Meanwhile, the US Dollar Index is staying relatively quiet following Monday’s modest decline and making it difficult for NZD/USD to find direction. The DXY is currently unchanged on the day at 89.86. Meanwhile, the S&P Futures are up 0.55%, suggesting that Wall Street’s main indexes will start the week on a firm footing after the long weekend. In case risk flows start to dominate the financial markets in the second half of the day, the greenback could start weakening against its rivals.

Later in the session, the US economic docket will feature the IHS Markit’s final Manufacturing PMI for May and the ISM Manufacturing PMI. Investors will keep a close eye on the Prices Paid Index component of the ISM’s report. A stronger-than-expected reading could revive inflation concerns and help the DXY gain traction.  

Technical levels to watch for