• NZD/USD rises sharply after closing deep in the red on Tuesday.
• Improving market sentiment is helping NZD/USD push higher.
• US Dollar Index loses traction ahead of ADP and PMI data.

The NZD/USD pair closed in the negative territory on Tuesday but didn't have a difficult time reversing its direction. As of writing, the pair was up 0.76% on a daily basis at 0.7197.

Earlier in the day, the data from New Zealand showed that the Unemployment Rate declined to 4.7% in the first quarter. This reading came in better than the market expectation and the previous quarter's print of 4.9% and helped the kiwi outperform its rivals. Furthermore, the Participation Rate improved to 70.4% from 70.2%.

On the other hand, the improving market sentiment is weighing on the greenback on Wednesday and allowing NZD/USD to preserve its bullish momentum. At the moment, the S&P 500 Futures are up 0.4% on the day and the US Dollar Index (DXY) is posting modest daily losses at 91.23.

If the price continues today's positive momentum, the next resistance could come from the 0.7200 psychological round figure mark .Next barrier before jumping towards the ascending trendline breakout point . Above this crucial line, the high from April 2021 at 0.7280 could halt the bullish rally.

On the filp side , the development of MACD indicator (bearish divergence ) hints at swelling downside momentum.If price fails to break above 0.7200 round figure mark , we will see decline towards next support at 0.7110.