NZD/USD consolidates daily gains above 0.69

After closing the previous day above the 0.69 handle, the NZD/USD pair was able to add to yesterday's gains on Tuesday but lost its bullish momentum after reaching a fresh session high at 0.6937. As of writing, the pair was trading at 0.6923, up 0.22%, or 15 pips, on the day.

The pair seems to be stuck in a 30-pip range on Tuesday as investors struggle to find a catalyst that could help the pair find a direction. The latest GDT auction rose to 3.6% from 3.1% but the pair couldn't take advantage as he US Dollar Index's latest attempt to break above the 99 level is capping the gains of the NZD/USD. However, this move is nothing but technical and it's unlikely to sustain unless it is supported by a fundamental development. At the moment, the DXY is up 0.04%, at 99.04.

The pair could witness an increased volatility during the Asian session when the employment report from New Zealand is released. Although the general consensus for the unemployment rate to remain unchanged at 5.2% for the first quarter of 2017, an increase in the labor cost index could awake the bulls and push the pair higher as it would contribute to a higher inflation. On the other hand, if any of the data miss the expectations and disappoint the markets, the pair may face some near-term selling pressure.

Technical outlook

The pair could encounter the first hurdle at 0.6940 (10-DMA/daily high) ahead of 0.7000 (psychological level) and 0.7080 (100-DMA). To the downside, supports could be seen at 0.6845/50 (10-month/Monday low), 0.6800 (psychological level) and 0.6705 (May. 31 low).

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