NZD/USD finds support near 0.7200, recovers modestly ahead of US data
- NZD/USD trades in the negative territory for the third straight day.
- USD's market valuation continues to drive NZD/USD's movements.
- Focus shifts macroeconomic data releases from the US.
The NZD/USD pair closed the previous two days in the negative territory and edged lower toward 0.7200 during the European trading hours on Thursday. However, the pair managed to stage a rebound and was last seen losing 0.17% on the day at 0.7224.
DXY retreats below 90.00 ahead of key US data
The USD's market valuation remains the primary driver of NZD/USD's action. Earlier in the day, the US Dollar Index (DXY) climbed to a daily high of 90.14 and weighed on NZD/USD. Although the DXY retreated below 90.00 in the last hour, the 0.75% increase seen in the benchmark 10-year US Treasury bond yield is helping the index stay in the green.
Later in the session, the US Department of Labor's weekly Initial Jobless Claims data and the ISM's Services PMI report will be looked upon for fresh impetus. Ahead of Friday's May jobs report, the ADP will release the Employment Change data as well.
On Tuesday, the ISM Manufacturing PMI report showed that input prices continued to increase at an unprecedented pace and triggered a rally in the US T-bond yields. A similar situation in the service sector could provide a boost to yields and help the USD gather strength against its rivals.
Meanwhile, S&P Futures and Nasdaq Futures both lose around 0.4% on the day, suggesting that the greenback could capitalize on the risk-averse environment if Wall Street's main indexes start the day lower.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
