NZD/USD pushes higher toward 0.6700 as USD struggles to find demand

• NZD/USD is edging higher after finishing the previous week in the red.
• US Dollar Index retreats toward 93.00 on Monday.
• Risk-on market environment makes it difficult for the USD to find demand.

The NZD/USD pair registered modest daily gains on Friday but closed the week modestly lower. With the market sentiment turning positive at the start of the new week, the pair started to edge higher and was last seen gaining 0.42% on a daily basis at 0.6691.

DXY retreats toward 93.00 on Monday

Earlier in the day, the data from New Zealand showed that the Business NZ Performance of Services Index dropped from 54.4 in July to 46.9 in August but was largely ignored by the market participants.

Meanwhile, the S&P 500 futures are up more than 1% on a daily basis on Monday, suggesting that risk flows could continue to dominate the markets and help the kiwi stay resilient against the USD.

On the other hand, the US Dollar Index (DXY) started the week on the back foot as the greenback struggles to find demand as a safe-haven. The University of Oxford and AstraZeneca announced that they will restart their COVID-19 immunization phase-3 trial and Pfizer said a coronavirus vaccine could be ready to be used in the US before the end of the year. These headlines seem to be providing a boost to sentiment. As of writing, the DXY is down 0.23% on the day at 93.05.

There won't be any macroeconomic data releases featured in the US economic docket on Monday.

Technical levels to watch for