• NZD/USD trades with a positive bias for the third successive day, though lacks follow-through.
• A big divergence in the Fed-RBNZ policy outlook continues to act as a headwind for the major.
• Traders might also refrain from placing fresh bets ahead of this week’s key releases from the US.

The NZD/USD pair attracts some buyers for the third successive day on Tuesday and holds steady above mid-0.6100s through the Asian session. Spot prices, however, remain well within the previous day's broader trading range, warranting some caution before positioning for an extension of the recent bounce from a three-week low touched last Thursday.

The US Dollar (USD) struggles to gain any meaningful traction in the wake of the uncertainty over the Federal Reserve's future rate-hike path and turns out to be a key factor lending support to the NZD/USD pair. It is worth recalling that the US central bank has signalled in June that borrowing costs may still need to rise as much as 50 bps by the end of this year and the outlook was reinforced by Fed Chair Jerome Powell last week. That said, the incoming US macro data has been fueling speculations that the central bank will soften its hawkish stance, sooner rather than later, which keeps the USD bulls on the defensive.

In fact, the US Bureau of Economic Analysis reported on Friday that the annual PCE Price Index decelerated to 3.8% in May from the 4.3% previous and the core gauge ticked lower to 4.6% from 4.7% in April. Adding to this, the ISM Manufacturing PMI remained in contraction territory for the eighth straight month in June and fell to its lowest level since May 2020. The markets, however, are still pricing in a 25 bps lift-off at the July FOMC meeting. This markets a big divergence as compared to the Reserve Bank of New Zealand's (RBNZ) dovish shift, signalling that it was done with its most aggressive hiking cycle since 1999.

The aforementioned fundamental backdrop makes it prudent to wait for strong follow-through selling before placing fresh bullish bets around the NZD/USD pair ahead of this week's important releases. The minutes of the June FOMC meeting are due on Wednesday and will be scrutinized for cues about the Fed's future rate-hike path. This will be followed by the US monthly jobs data - popularly known as the Nonfarm Payrolls (NFP) on Friday, which should influence the USD. In the meantime, traders might prefer to wait on the sidelines amid relatively thin trading on the back of the Independence Day holiday in the US.