NZD/USD consolidates gains after touching multi-week high of 0.7286
- NZD/USD lost its bullish momentum before reaching 0.7300.
- US Dollar Index stays calm following Wednesday's sharp decline.
- US economy is expected to grow by 6.1% in the first quarter.
The NZD/USD pair gained more than 60 pips on Wednesday and climbed to its highest level since early March at 0.7286 on Thursday. Ahead of key macroeconomic data releases from the US, the pair seems to have gone into a consolidation phase and was last seen trading at 0.7260, where it was up 0.12% on a daily basis.
USD selloff pauses ahead of US data
Following its April meeting, the US Federal Reserve decided to leave its monetary policy settings unchanged. Although the policy statement underlined improving economic outlook, FOMC Chairman Jerome Powell's comments weighed on the greenback.
Powell downplayed concerns over price pressures and reiterated that they are not even thinking about tapering as they still have a long way to go before reaching employment and inflation goals. The US Dollar Index (DXY) turned south during Powell's press conference and fell to its lowest level in two months at 90.42. Currently, the DXY is flat on the day at 90.60.
Later in the session, the US Bureau of Economic Analysis will release its first estimate for the first-quarter GDP growth, which is expected to show that the US economy expanded by 6.1% on a yearly basis. Additionally, the US Department of Labor's weekly Initial Jobless Claims data will be looked upon for fresh impetus as well.
Although a stronger-than-expected reading could help the USD show some resilience against its rivals, the risk-on market environment is likely to limit its gains. The S&P 500 Index remains on track to open at a new record high above 4,200 on Thursday with the S&P 500 Futures rising 0.7% ahead of the opening bell.
Technical levels to watch for