NZD/USD moves sideways around 0.6600 ahead of key New Zealand jobs report

• NZD/USD is fluctuating in a tight range on Tuesday.
• US Dollar Index posts small daily losses below 93.50.
• Unemployment Rate in New Zealand is expected to rise to 5.8% in Q2.

The NZD/USD pair closed the first day of the week with small losses and is now struggling to make a decisive move in either direction. As of writing, the pair was virtually unchanged on a daily basis at 0.6612.

On Monday, the broad-based USD strength witnesses during the first half of the day caused the pair to edge lower. With the 10-year US Treasury bond yield losing more than 2% on Tuesday, the US Dollar Index dropped into the negative territory and was last seen down 0.1% on the day at 93.42.

In the second half of the day, the ISM-NY Business Conditions Index and the IBD/TIPP Economic Optimism data will be looked upon for fresh impetus.

More importantly, Statistics New Zealand will release its labour market report in the early trading hours of the Asian session on Wednesday. Market participants expect the Unemployment Rate in the second quarter to rise from 4.2% to 5.8% with the Employment Change declining by 2%. Better-than-expected jobs figures could provide a boost to the kiwi and help NZD/USD erase Monday's losses. On the other hand, 

NZD/USD near-term outlook

“Yesterday, we held the view that NZD ‘could test the strong support at 0.6600’ but ‘a sustained decline below this level is unlikely’. NZD subsequently dropped to a low of 0.6575 before rebounding," FX strategists at the UOB Group said. "While downward pressure is not strong, there is scope for NZD to retest the 0.6575 level before a more sustained recovery can be expected. Resistance is at 0.6630 followed by 0.6650.”

Technical levels to watch for