NZD/USD steadies above 0.6500 after renewing multi-week highs

• NZD/USD is rising for the third straight day on Thursday.
• US Dollar Index is posting modest gains above 97.00.
• Unemployment Rate in the US fell to 11.1% in June. 

The NZD/USD pair advanced to its highest level since June 11th at 0.6537 during the early trading hours of the American session on Thursday but struggled to preserve its bullish momentum. As of writing, the pair was trading at 0.6510, gaining 0.55% on the day and remaining on track to close the third straight day in the positive territory.

DXY recovers in the second half of the day

Earlier in the day, the risk-on market environment weighed on the USD and allowed NZD/USD to gain traction. After the data from the US showed an impressive increase in Nonfarm Payrolls (NFP), risk-on flows continued to dominate the markets and the pair stretched higher.

The US Bureau of Labor Statistics announced that NFP surged by 4.8 million in June. This reading beat the market expectation of 3 million by a wide margin. Moreover, the Unemployment Rate dropped from 13.3% in May to 11.1%. 

However, the latest coronavirus figures from the US forced investors to turn cautious and allowed the US Dollar Index (DXY) to stage a rebound.

Confirmed number of COVID-19 cases in Florida rose more than 10,000 on Thursday to post the one-day increase since the start of the pandemic. With the DXY climbing to 97.30 area on this headline, the pair started to pull away from its highs. 

There won’t be any macroeconomic data releases from New Zealand on Friday and the pair is likely to stay in a consolidation phase as US markets will be closed due to the Independence Day holiday.

Technical levels to watch for