NZD/USD remains in tight range below 0.72 despite USD strength

• AUD/NZD slide helps kiwi show resilience against the buck.
• DXY extends upside above the 92 handle.
• NZD/USD trades in a 30-pip range on Tuesday.

The NZD/USD pair inched higher to its best level since mid-October at 0.7196 earlier today but failed to break above the 0.72 handle and went into a consolidation phase. As of writing, the pair was trading at 0.7180, up 0.15% on the day.

The NZD is one of the few currencies that is not recording losses against the buck on Tuesday. Crude oil's ability to preserve its gains following the rally witnessed in the first week of 2018 helps the commodity-sensitive kiwi. Moreover, a sharp drop witnessed in the AUD/NZD pair suggests that investors prefer the NZD over the AUD.

On the other hand, the pair's bullish momentum is having a difficult time gaining strength amid a broad-based market interest for the greenback. After closing the first trading day of the week above the 92 mark, the US Dollar Index pushed higher as participants price increasing probability of a rate hike in March. As of writing, the index is at 92.30, adding 0.24% on the day.

Later in the session, JOLTS Job Openings and IBD/TIPP Economic Optimism Index from the U.S. will be followed by markets for fresh impetus. In the Asian session on Wednesday, China is going to release the CPI figures for December. A higher-than-expected inflation reading from China could provide an additional boost to the kiwi and help the pair re-test the 0.72 mark.

Technical levels to watch

With a decisive break above 0.7200 (psychological level/Oct. 16 high), the pair could extend its gains toward 0.7240 (Sep. 29 high) and 0.7340 (Sep. 22 high). On the downside, supports are located at 0.7140 (200-DMA), 0.7100 (psychological level) and 0.7025 (100-DMA).