NZD/USD trades at highest level since late January above 0.6600

• NZD/USD gains traction on risk flows, climbs above 0.6600.
• USD remains under pressure with DXY staying below 96.00.
• Credit Card Spending in New Zealand declined less than expected in June.

The NZD/USD pair gained nearly 30 pips on Monday and preserved its bullish momentum on Tuesday with the risk-sensitive NZD finding demand in the risk-on market environment. As of writing, the pair was trading at its highest level since late January at 0.6612, gaining 0.57% on a daily basis.

Earlier in the day, the data from New Zealand showed that Credit Card Sales in June declined by 9.2% on a yearly basis in June. This reading came in much better than the market expectation for a decrease of 24.7% and helped the NZD gather strength.

Moreover, the upbeat market mood amid coronavirus vaccine hopes and the EU recovery fund agreement weighed on the safe-haven USD and allowed NZD/USD to push higher. 

Eyes on Wall Street

The US Dollar Index, which lost 0.2% on a daily basis on Monday, is now losing 0.1% on the day at 95.73. In the absence of significant macroeconomic data releases from the US, investors will keep a close eye on the performance of Wall Street's main indexes.

At the moment, S&P 500 futures are up 0.8% on the day, suggesting that the USD could struggle to shake off the bearish pressure during the American session. Meanwhile, the bi-weekly GDT PriceAuction from New Zealand will be looked upon for fresh impetus.

Technical levels to watch for