NZD/USD retraces portion of weekly losses, clings to daily gains above 0.6600
|- NZD/USD gained traction after closing the previous three days lower.
- Upbeat data from China helped NZD gather strength.
- US Dollar Index is falling for the third straight day on Friday.
After closing the previous three days in the negative territory and touching its lowest level in 10 days at 0.6546, the NZD/USD pair staged a rebound on Friday. As of writing, the pair was up 0.57% on a daily basis at 0.6610.
Focus shifts to US politics
Earlier in the day, the data from China showed that the business activity in the service sector in September expanded at a strong pace than expected. The Caixin Services PMI rose to 54.8 from 54 in August and beat the market expectation of 50.7. The upbeat data from China provided a boost to China-proxy kiwi and helped NZD/USD gain traction during the Asian trading hours.
On the other hand, the US Dollar Index (DXY), which posted modest losses on Thursday, continued to push lower on Friday and allowed NZD/USD to preserve its bullish momentum. At the moment, the DXY is down 0.25% on the day at 93.35.
There won't be any macroeconomic data releases featured in the US economic docket and investors will be keeping a close eye on Wall Street's performance and political developments surrounding standalone stimulus bills. If major equity indexes build on this week's gains and push higher on Friday, the greenback could have a tough time finding demand.
Technical levels to watch for
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