NZD/USD pares early gains, turns flat near 0.6050

• NZD/USD struggles to find direction on Tuesday, trades in tight range.
• US Dollar Index extends recover into second straight day.
• Coming up: ISM Non-Manufacturing PMI from US and labour market data from New Zealand.

After closing the first day of the week with small losses, the NZD/USD pair staged a technical correction during the Asian trading hours but struggled to preserve its momentum. The pair, which touched a daily high of 0.6076, was last seen trading flat on the day at 0.6047.

Following a six-day long losing streak, the US Dollar Index (DXY) gained 0.85% on Monday and extended its rebound on Tuesday. Ahead of the Institue for Supply Management's (ISM) Non-Manufacturing Index, the index tested the 100 mark before retreating slightly. As of writing, the DXY was up 0.27% on a daily basis at 99.78. 

Eyes on NZ jobs report

Earlier in the day, the data from New Zealand showed that the Australia and New Zealand Banking Group's (ANZ) Commodity Price Index declined by 1.1% on a monthly basis in April but was largely ignored by the market participants.  

In the second half of the day, New Zealand's bi-weekly Global Dairy Trade auction's Price Index will be looked upon for fresh impetus as well. More importantly, New Zealand's jobs report will be published in the early trading hours of the Asian session on Wednesday. Markets expect the Unemployment Rate to rise to 4.3% in the first quarter of the year from 4% and a worse than expected reading could further weigh on the pair.

Previewing the data, “it’s unlikely that the market will put much weight on these surveys, as they will provide little guidance as to how bad things could get in the coming months,” Westpac analysts said.

Technical levels to watch for