NZD/USD erases early gains, turns flat near 0.6460 ahead of NZ jobs data

• NZD/USD trades in tight range above 0.6450 on Tuesday.
• US Dollar Index edges higher toward 98 on rising T-bond yields.
• Unemployment Rate in Q4 is expected to remain unchanged at 4.2% in New Zealand.

The NZD/USD pair advanced to a fresh daily high of 0.6477 but erased its gains amid broad-based USD strength. As of writing, the pair was virtually unchanged on the day at 0.6460.

Easing concerns over the coronavirus outbreak having a significant negative impact on the Chinese economy helped antipodeans find demand during the Asian trading hours. Additionally, the Reserve Bank of Australia's (RBA) policy outlook helped the AUD/USD pair push higher and provided an additional boost to the positively-correlated NZD/USD pair. 

However, the broad-based USD strength on Tuesday forced the pair to retrace its daily upside. The US Dollar Index, which tracks the greenback's value against a basket of six major currencies, is up 0.12% on the day at 97.92. The US economic docket will feature the IBD/TIPP Economic Optimism Index and the ISM New York's Business Conditions Index.

Eyes on NZ labour market report

During the Asian trading hours on Wednesday, labour market data from New Zealand will be looked upon for fresh impetus. Experts see the Unemployment Rate remain steady at 4.2% in the fourth quarter.

"With inflation on track to be comfortably within the target range over the next year, the RBNZ’s other mandate – supporting maximum sustainable employment – is likely to be key to any future monetary policy moves," said Westpac analysts to emphasize the importance of that data. 

Technical levels to watch for