NZD/USD struggles to find direction, trades below 0.6650

• NZD/USD is fluctuating in a tight range on Thursday.
• US Dollar Index stages a modest recovery toward 93.00.
• Eyes on weekly Initial Jobless Claims data from the US.

The NZD/USD pair is struggling to make a decisive move in either direction amid a lack of significant fundamental drivers on Thursday. As of writing, the pair was down 0.08% on the day at 0.6640.

Earlier in the day, the data published by the Reserve Bank of New Zealand (RBNZ) showed that Inflation Expectation for the third quarter rose modestly to 1.43% from 1.24% in the second quarter. However, this reading failed to provide a boost to the NZD.

On the other hand, the US Dollar Index (DXY), which dropped to its lowest level since May 2018 at 92.52 earlier in the day, is staging a rebound ahead of the American session, forcing NZD/USD to stay in the negative territory. At the moment, the DXY is up 0.1% on the day at 92.90.

The US Department of Labor's weekly Initial Jobless Claims data will be featured in the US economic docket on Thursday.

NZD/USD outlook

Westpac analysts think that NZD/USD remains "slightly biased to the upside" after breaking above 0.6600 and see the pair targeting 0.6750 in the months ahead. 

“The fundamental backdrop remains supportive: trend decline in the USD, global demand for risky assets, unprecedented fiscal and central bank stimulus, NZ economic (and COVID management) outperformance, and China’s recovery boosting demand for NZ commodities,” analysts further explained.

Technical levels to watch for