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  • NZD/USD is struggling to find direction on Tuesday.
  • US Dollar Index fluctuates in a very tight range near 93.50.
  • FOMC Chairman Powell will speak about the economy later in the day.

The NZD/USD pair dropped to a daily low of 0.6624 in the early European session but didn’t have a difficult time erasing its losses. As of writing, the pair was virtually unchanged on the day at 0.6645.

DXY goes into consolidation on Tuesday

The USD’s market valuation continues to impact NZD/USD movements at the start of the week. After losing 0.38% on Monday, the US Dollar Index (DXY) is staying relatively quiet around mid-93.00s on Tuesday and not providing any directional clues for the time being.

Later in the day, the August Trade Balance will be the only data featured in the US economic docket. More importantly, FOMC Chairman Jerome Powell will be giving a speech on the current state of the economy at 1440 GMT. Powell is not expected to deliver any surprising comments on the policy outlook given that the Federal Reserve had already announced its new strategy and forward guidance.

Meanwhile, investors will keep a close eye on headlines surrounding stimulus talks in the US. According to several news outlets, negotiations are going very slowly and the lack of progress could weigh on US stock markets and help the greenback gather strength in the second half of the day. At the moment, the S&P 500 futures are down 0.2% on the day.

There won’t be any macroeconomic data releases from New Zealand during the Asian session on Wednesday.

Technical levels to watch for