NZD/USD pares early losses, turns flat below 0.6000

• US Dollar Index recovers above 100 on Wednesday.
• Market sentiment turns sour with European stocks posting losses.
• FOMC will release the minutes of its March 15 meeting.

The NZD/USD pair closed the first two days of the week in the positive territory but lost its traction on Wednesday. After slumping to a daily low of 0.5940 earlier in the day, the pair erased its losses and was last seen trading flat at 0.5975.

The risk rally that dominated the financial markets at the start of the week seems to be fading away and making it difficult for the kiwi to find demand. Reflecting the sour moon on Wednesday, major equity indexes in Europea are erasing more than 1%.

Attention shifts to FOMC Minutes

Meanwhile, the selling pressure surrounding the greenback also seems to have softened with the US Dollar Index rebounding above the 100 handle. Later in the day, the FOMC will release the minutes of its latest meeting that took place on March 15^th.

Previewing this event, “the minutes of the unscheduled FOMC meeting last month on March 15^th may give that rare glimpse behind the headlines to see what was motivating the central bank at its second emergency meeting that month,” said FXStreet Senior Analyst Joseph Trevisani.

Technical levels to watch for