- The US Dollar Index advances to 94.20 in the early NA session.
- Market sentiment improves a little on Tuesday.
The NZD/USD pair, which lost 30 pips on Monday, remains under a modest selling pressure on Tuesday as the greenback continues to retrace yesterday’s drop. After refreshing its lowest day in five days at 0.6853, the pair is having a tough time recovering its losses and was last seen trading at 0.6858, where it was down 45 pips, or 0.6%, on the day.
Despite the USD weakness on Monday, the risk aversion weighed on the commodity-linked kiwi and dragged the pair lower. Although the risk appetite seems to be coming back to markets on Tuesday, the buck’s strength doesn’t allow the pair to reverse its course. Major equity indexes, which recorded substantial losses yesterday, started the day flat and was last seen holding on to small gains.
Today’s data from the United States showed that the S&P/Case-Shiller Home Price Index increased by 6.6%, slightly below the market expectation of 6.8%. Moreover, the Richmond Fed Manufacturing Index improved to 20 in June from 16 in May. At the moment, the US Dollar Index is up 0.25% on the day at 94.20.
In the Asian session on Wednesday, trade balance data from New Zealand will be released. However, ahead of Thursday’s RBNZ meeting, the data is unlikely to trigger a meaningful reaction.
Technical levels to consider
The pair could encounter the first technical support at 0.6865 (Jun. 21 low) ahead of 0.6780 (Nov. 17, 2017, low) and 0.6700 (psychological level). On the upside, resistances align at 0.6900 (daily high/10-DMA), 0.6940 (Jun. 17 high) and 0.7000 (psychological level).
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