NZD/USD taps 0.6600 mark for the first time since January 24

The NZD/USD pair shot to its highest level since January 24 in the last hour, albeit struggled to extend the momentum beyond the 0.6600 mark and quickly retreated few pips thereafter.

The pair built on its recent strong gains recorded over the past two weeks or so and continued scaling higher through the early North American session. The upbeat market mood underpinned sentiment surrounding perceived riskier currencies, including the kiwi, and remained supportive amid a subdued US dollar price action.

Despite worries over the ever-increasing coronavirus cases, the incoming positive economic data has been fueling hopes of a sharp V-shaped global economic recovery. The optimism was evident from the recent rally in the global equity markets, which was seen as one of the key factors denting demand for the safe-haven greenback.

The USD remained depressed near multi-week lows and failed to gain any respite from Thursday's release of the US Initial Weekly Jobless Claims, which came in at 1.314 million for the week that ended July 3. This was the lowest reading since mid-March and offered further evidence that the worse of the coronavirus pandemic was probably over.

Given last week's sustained move beyond the 0.6500 psychological mark, confirming a convincing breakthrough a bullish flag, the ongoing positive momentum could further be attributed to some follow-through technical buying. However, slightly overbought conditions on daily/hourly charts seemed to be the only factor capping further gains.

Technical levels to watch