NZD/USD advances toward 0.6550, renews session highs
- NZD/USD is staging a modest recovery after posting losses on Monday.
- USD struggles to find demand as risk flows return.
- Investors wait for macroeconomic data releases from the US.
The NZD/USD pair posted small losses on Monday amid the broad-based USD strength but didn't have a difficult time staging a rebound on Tuesday. However, the pair is trading in a tight 30-pip range and is having a tough time making a decisive move in either direction. As of writing, NZD/USD was up 0.25% on the day at 0.6541.
Risk flows help NZD find demand
During the Asian session, positive headlines coming out of US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He's phone conversation allowed market sentiment to turn positive. Reportedly, sides were able to make progress and were hoping for more in the near-term.
Reflecting the upbeat market mood, major European equity indexes trade in the green and the S&P 500 futures are up 0.4% on the day. Additionally, the 10-year US Treasury bond yield is rising more than 4% at 0.692%.
On the other hand, the US Dollar Index (DXY), which posted gains for the second straight trading day on Monday, seems to have lost its traction. With the DXY losing 0.25% on the day at 93.06, NZD/USD continues to float in the positive territory.
Later in the session, the Conference Board's Consumer Confidence Index from the US will be watched closely by the market participants. Other data releases featured in the US economic docket on Tuesday will include New Home Sales and Richmond Fed Manufacturing Index.
Technical levels to watch for