NZD/USD erases Wednesday's gains, trades below 0.6550
- NZD/USD is staying under bearish pressure following Wednesday's climb.
- Upbeat GDP data from China failed to provide a boost to NZD.
- US Dollar Index is staging a recovery ahead of key data.
The NZD/USD pair gained around 30 pips on Wednesday but struggled to preserve its bullish momentum on Thursday. As of writing, the pair was down 0.45% on the day at 0.6540.
Eyes on US data
Earlier in the day, the data from China showed that Industrial Production expanded by 4.8% on a yearly basis in June and the Gross Domestic Product expanded by 11.5% on a quarterly basis in the second quarter. However, annual Retail Sales in China contracted by 1.8% in June and didn't allow the China-proxy NZD to gather strength against its rivals.
Meanwhile, the souring market sentiment put additional weight on the risk-sensitive kiwi's shoulders and caused the bearish pressure to remain intact.
In the second half of the day, the weekly Initial Jobless Claims and Retail Sales data will be featured in the US economic docket. Ahead of these data, the US Dollar Index (DXY) is up 0.2% on the day at 96.23 and the S&P 500 futures are losing 0.65% on the day. If risk-aversion continues to dominate the financial markets in the second half of the day, the DXY could push higher and drag the pair toward 0.6500.
Technical levels to watch for