- NZD/USD rises sharply after closing deep in the red on Tuesday.
- Improving market sentiment is helping NZD/USD push higher.
- US Dollar Index loses traction ahead of ADP and PMI data.
The NZD/USD pair closed in the negative territory on Tuesday but didn't have a difficult time reversing its direction. As of writing, the pair was up 0.76% on a daily basis at 0.7197.
NZD capitalizes on upbeat jobs report
Earlier in the day, the data from New Zealand showed that the Unemployment Rate declined to 4.7% in the first quarter. This reading came in better than the market expectation and the previous quarter's print of 4.9% and helped the kiwi outperform its rivals. Furthermore, the Participation Rate improved to 70.4% from 70.2%.
On the other hand, the improving market sentiment is weighing on the greenback on Wednesday and allowing NZD/USD to preserve its bullish momentum. At the moment, the S&P 500 Futures are up 0.4% on the day and the US Dollar Index (DXY) is posting modest daily losses at 91.23.
If Wall Street's main indexes manage to open decisively higher, the DXY is likely to remain on the back foot in the second half of the day.
Later in the session, the ADP's monthly private sector employment report and the ISM's Services PMI data will be watched closely by market participants. On Thursday, the ANZ Business Confidence and the ANZ Activity Outlook will be released from New Zealand during the Asian trading hours.
Technical levels to watch for
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