NZD/USD finds support ahead of 0.6500, stays in red ahead of US Consumer Confidence data

• US Durable Goods Orders rebounded sharply in December.
• US Dollar Index continues to push higher, stays above 98.
• Coming up: Conference Board's Consumer Confidence Index and Richmond Fed Manufacturing Index.

Despite the broad-based USD strength, the NZD/USD pair erased a small portion of its daily gains after touching its lowest level in eight weeks at 0.6520 earlier in the day. As of writing, the pair was trading at 0.6532, still down 0.25% on a daily basis. Nevertheless, this modest recovery seems to be a technical correction and the pair is likely to remain vulnerable in the short-term.

Focus remains on coronavirus

The lack of significant macroeconomic data releases at the start of the week caused the headlines surrounding the coronavirus outbreak to continue to drive the markets. With no signs of containment of the outbreak, investors are worried about the potential negative impact on the Chinese economy.

In the meantime, the data published by the US Census Bureau on Tuesday showed that Durable Goods Orders rose 2.4% in December after falling 3.1% in November. On a negative note, however, Durable Goods Orders Excluding Defense dropped 2.5% in the same period.

The US Dollar Index largely ignored the mixed data and continues to float above the 98 handle ahead of the Conference Board's Consumer Confidence Index data.

In the early trading hours of the Asian session on Wednesday, a significant reaction from the AUD/USD pair to the CPI data from Australia could cause the positively-correlated NZD/USD pair to move accordingly.

Technical levels to watch for