NZD/USD climbs to fresh two-year highs near 0.7040

• Kiwi heads for fourth weekly gains in a row versus the US dollar.
• NZD/USD holds above 0.7000, reinforces bullish momentum.

The NZD/USD pair climbed to 0.7038 boosted by a weaker US dollar across the board and reached the highest level since June 2018. It then pulled back modestly, holding above 0.7000 and it is trading at 0.7025/30, up 80 pips for the day.

 The key driver on Friday is the decline of the US dollar. The DXY dropped below 91.80, approaching the 2020 low. The NZD/USD lost momentum later as Wall Street futures pulled back.

From a weekly perspective, NZD/USD is about to post the fourth gain in a row and the strongest close since May 2018. The improvement in risk sentiment continues to be the key driver. Over the last days, hopes on the COVID-19 vaccine was the key factor.

Technically, NZD/USD remains bullish with key indicators at overbought levels but no signs of a correction area seen. A decline back under 0.7000 would favor a consolidation or a correction. The next strong resistance might be seen at 0.7055. Support levels might be seen at 0.6980 followed by 0.6940.

Technical levels