NZD/USD sees a relief rally toward 0.6200 ahead of US ADP data

NZD/USD is staging a solid comeback. Heading toward 0.6200 in the Asian session on Wednesday. The pair is witnessing a relief rally after two days of sharp correction from five-month highs of 0.6223.

A broad-based US Dollar retreat is aiding the turnaround in the New Zealand Dollar (NZD), despite sagging Asian stocks and a fresh buying interest seen around the US Treasury bond yields.

Therefore, the rebound in the pair could be purely technically driven, helped by profit-taking on the recent US Dollar recovery, as traders reposition themselves ahead of the key US ADP Employment Change data due later in American trading on Wednesday.  

The US Dollar pauses its recovery momentum, as markets reassess US Federal Reserve (Fed) interest rate cut expectations after a set of mixed US economic data released on Tuesday.

The Institute for Supply Management (ISM) said on Tuesday that its Services PMI rebounded from a five-month low of 51.8 to 52.7 in November while the JOLTS Job Openings totaled 8.73 million for the month, a decline of 617,000, the Labor Department reported Tuesday.

The NZD/USD pair tumbled to a three-day low of 0.6125 a day ago, tracking the sell-off in AUD/USD after the Reserve Bank of Australia (RBA) held the interest rate at 4.35% in November but adopted a cautious approach in its communication.

NZD/USD Technical levels to watch