NZD/USD consolidates Wednesday's gains, holds above 0.7200 ahead of US data
- NZD/USD trades in a relatively tight range on Thursday.
- Business confidence continued to improve in New Zealand in May.
- US Dollar Index stays in the negative territory near 91.00 ahead of US data.
The NZD/USD pair gained more than 50 pips on Wednesday and close above 0.7200 before going into a consolidation phase on Thursday. As of writing, the pair was virtually unchanged on a daily basis at 0.7212.
DXY retreats to 91.00 area
The risk-positive market environment and the upbeat labour market report from New Zealand provided a boost to the kiwi on Wednesday. The Unemployment Rate in the first quarter declined to 4.7% and came in better than the market expectation of 4.9%.
On the other hand, the greenback continues to have a difficult time finding demand with investors waiting for Friday's critical Nonfarm Payrolls (NFP) report. The US Dollar Index (DXY), which lost its traction for the third straight day before reaching 91.50 on Wednesday, is currently losing 0.25% on the day at 91.03.
Later in the session, the US Department of Labor's weekly Initial Jobless Claims will be looked upon for fresh impetus. However, the market reaction is likely to remain short-lived.
In the meantime, the S&P 500 Futures are posting modest daily gains, suggesting that the USD could remain on the back foot in the second half of the day if risk flows continue to dominate the financial markets.
Technical levels to watch for