NZD/USD erases portion of early gains, continues to trade in green near 0.6650
- NZD/USD gained traction on upbeat data releases on Tuesday.
- Broad-based USD strength keeps NZD/USD's upside limited ahead of American session.
- September CPI data will be featured in the US economic docket.
The NZD/USD pair closed the first day of the week in the negative territory but started the edge higher on the back of upbeat macroeconomic data releases on Tuesday. However, the pair met resistance near 0.6670 during the European trading hours and erased a portion of its daily gains. As of writing, NZD/USD was up 0.12% on the day at 0.6652.
Kiwi capitalizes on strong data
The data published by Statistics New Zealand showed on Tuesday that Electronic Card Retail Sales in September increased by 5.4% following August's decline of 8.9% and helped the kiwi gather strength against its peers. More importantly, the data from China revealed that the country's imports surged by 13.2% in September, compared to analysts' estimate for an increase of 0.2%, and provided an additional boost to the China-proxy kiwi.
On the other hand, the cautious market mood amid a lack of progress in US stimulus talks and uncertainty surrounding Brexit talks helps the greenback find demand as a safe-haven. At the moment, the US Dollar Index (DXY) is up 0.15% on the day at 93.18.
Later in the day, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for September. However, the fact that the Federal Reserve uses the Personal Consumption Expenditure (PCE) Price Index as its preferred gauge inflation suggests that the market reaction to the CPI report is likely to be limited.
Technical levels to watch for