NZD/USD regains traction after correction, climbs above 0.6780

• NZD/USD staged a correction after coming with a few pips of 0.6800.
• US Dollar Index struggles to hold above 93.00 in American session.
• Consumer confidence in the US strengthened in September.

The NZD/USD pair rose to its highest level since April 2019 at 0.6798 on Friday but staged a correction and returned to 0.6760 area in the early American session. With the greenback struggling to find demand, however, the pair regained its traction and advanced toward 0.6780 region, where it was up 0.35% on the day.

On Friday, New Zealand’s finance minister, Grant Robertson, argued that the Reserve Bank of New Zealand (RBNZ) would opt out to leave rates unchanged until March of 2021 if the recovery were to be stronger than expected. Boosted by this comment, NZD/USD surged higher during the Asian trading hours.

DXY looks to snap two-week winning streak

On the other hand, the US Dollar Index (DXY) spent the first half of the day moving sideways below 93.00. Although the index edged higher following an uninspiring opening in Wall Street, it struggled to preserve its momentum and was last posting small daily losses at 92.83. Unless it climbs to 93.30 before the end of the day, the DXY will snap a two-week winning streak.

The only data from the US on Friday showed that the University of Michigan’s Consumer Sentiment Index improved to 78.9 in September’s advanced estimate and beat the market expectation of 75. Nevertheless, this report had little to no impact on market sentiment.

Technical levels to watch for