NZD/USD clings to modest recovery gains above 0.6600
- NZD/USD is staging a rebound after Thursday's slump.
- US Dollar Index edges lower toward mid-93.00s ahead of US data.
- Retail Sales in US is expected to increase by 0.7% in September.
The NZD/USD pair lost more than 50 pips on Thursday and started to erase its losses on Friday. As of writing, the pair was up 0.27% on a daily basis at 0.6610.
DXY edges lower ahead of US data
In the absence of significant fundamental drivers, the market sentiment and the USD's valuation continue to impact NZD/USD's movements. The only data from New Zealand showed on Friday that the business activity in the service sector expanded at a strong pace in September with the Business NZ PMI rising to 54 from 50.7 in August.
Meanwhile, the relatively upbeat market mood on Friday is making it difficult for the greenback to preserve its strength against its rivals. After rising to 93.90 on Thursday, the US Dollar Index (DXY) seems to have gone into a consolidation phase and was last seen losing 0.19% on the day at 93.59.
In the early American session, September Retail Sales data from the US will be looked upon for fresh impetus. Investors expect to see a 0.7% monthly increase and a better-than-expected reading could help risk flows to continue to dominate the markets.
Other data from the US will include Industrial Production and the University of Michigan's Consumer Sentiment Index.
Technical levels to watch for