NZD/USD fails to hold above 0.7300, eyes on US data

• NZD/USD lost its traction after rising above 0.7300.
• US Dollar Index stays below 91.00 ahead of US data.
• Rising US T-bond yields help USD stay resilient.

The NZD/USD pair closed the first two days of the week in the positive territory and edged higher to a daily top of 0.7305 on Wednesday. However, the pair seems to be having a tough time preserving its bullish momentum and was last seen trading flat on the day at 0.7286.

Focus shifts to US data

Earlier in the day, the data from China showed that the Caixin Services PMI in February declined to 51.5 from 52 in January but this report was largely ignored by the market participants.

Meanwhile, the upbeat market mood is helping the risk-sensitive NZD find demand on Wednesday. Reflecting the risk-on market environment, major European equity indexes rise around 1% and the S&P 500 Futures are up 0.55%. 

On the other hand, a 4% increase seen in the benchmark 10-year US Treasury bond yield is providing a boost to the USD and limiting NZD/USD’s upside. At the moment, the US Dollar Index is a little changed on the day at 90.79.

Later in the session, the ADP Employment Change and the ISM Services PMI data from the US will be watched closely by the market participants. Additionally, the Federal Reserve will release its Beige Book at 1900 GMT. 

Technical levels to watch for