NZD/USD climbs to fresh weekly high above 0.6950

• NZD/USD extended its daily rally in the early American session.
• US Dollar Index stays in the negative territory below 92.90.
• Market mood remains upbeat following mixed data releases from US.

After posting strong daily gains on Monday, the NZD/USD pair preserved its bullish momentum on Tuesday and reached a fresh weekly high of 0.6962 during the American trading hours. As of writing, the pair was up 1% on a daily basis at 0.6960.

Risk flows lift NZD, USD continues to weaken

Earlier in the day, the upbeat data from New Zealand provided a boost to the kiwi. According to Statistics New Zealand, Retail Sales rose by 3.3% on a quarterly basis, beating the market expectation of 2% by a wide margin. 

Additionally, the risk-positive market environment continues to help NZD/USD push higher in the second half of the day. Currently, the S&P 500 Index is trading at a new all-time high of 4,490, rising 0.25% on the day. 

On the other hand, the greenback remains on the back foot as it struggles to find demand as a safe haven. The data from the US revealed on Tuesday that New Home Sales increased by 1% in July, compared to analysts' estimate for a decrease of 2.7%. On a negative note, the Richmond Fed's Manufacturing Index fell to 9 in August from 27 in July.

Nevertheless, these figures failed to trigger a noticeable market reaction and the US Dollar Index was last seen losing 0.15% at 92.84.

On Wednesday, Trade Balance data from New Zealand will be looked upon for fresh impetus.

Technical levels to watch for