NZD/USD extends daily rally beyond 0.7260 amid ongoing USD selloff

• NZD/USD is rising for the second straight day on Friday.
• US Dollar Index down more than 0.3% ahead of US data.
• Wall Street's main indexes trade in the positive territory.

The NZD/USD pair closed above 0.7200 on Thursday and preserved its bullish momentum on Friday. As of writing, the pair was up 0.62% on the day at 0.7265.

DXY edges lower toward 90.00

The selling pressure surrounding the USD and the risk-positive market environment seems to be fueling NZD/USD's upside ahead of the weekend.

The US Dollar Index (DXY), which lost 0.4% on Thursday, continues to push lower as investors show no interest in the safe-haven greenback. Reflecting the upbeat market mood, the S&P 500 Futures are up 0.35% on the day. If Wall Street's main indexes register decisive gains after the opening bell, the DXY is likely to remain on the back foot and help NZD/USD extend its two-day rally.

Earlier in the day, the data from New Zealand showed that the Producer Price Index - Input in the fourth quarter fell to 0% from 0.6% in the previous quarter but this reading failed to trigger a meaningful market reaction.

On the other hand, the US economic docket will feature the IHS Markit's preliminary Manufacturing and Services PMI reports for February and January Existing Home Sales.

Technical levels to watch for