NZD/USD retraces Tuesday's drop, trades around 0.6800

• Upbeat Chinese data boost demand for antipodeans on Wednesday.
• US Dollar Index eases from multi-week highs.
• ADP employment data and Services PMI reports from the U.S. coming up next.

After dropping to its lowest level since mid-February at 0.6738 on Tuesday, the NZD/USD pair staged a decisive recovery on Wednesday and erased yesterday's losses. As of writing, the pair was trading at 0.6794, adding 0.56% on a daily basis.

Earlier in the day, the data from China showed that the economic activity in the service sector expanded at a more robust pace than expected in March with the Caixin Services PMI jumping to 54.4 from 51.1 in February. Additionally, the ANZ Commodity Price Index rose 1.4% in New Zealand in March to beat the analysts' estimate for a drop of 0.3% to provide an additional boost to the kiwi.

In the meantime, the greenback seems to be losing its strength against its rivals on Wednesday with investors looking to capitalize on the risk-on flows. Ahead of the ADP employment report and the ISM and the IHS Markit Services PMI data from the U.S., the US Dollar Index is losing 0.27% on the day at 97.05.

In the second half of the day, markets will be paying close attention to the risk-sentiment and the greenback's valuation.

Technical levels to consider