NZD/USD retreats from highs, holds above 0.6900

• NZD/USD touched its highest level since March 2019 above 0.6900.
• US Dollar Index pares daily losses in early American session.
• Risk flows continue to support NZD on Wednesday.

The NZD/USD pair touched its highest level since March 2019 at 0.6931 during the European session on Wednesday as the upbeat market mood helped the risk-sensitive NZD gather strength against the USD. With the greenback finding some demand in early American trading hours, the pair retreated slightly but was still up 0.4% on the day at 0.6915.

Eyes on Wall Street

The risk-positive environment after Pfizer announced that its coronavirus vaccine candidate showed a 95% effectiveness in the final efficacy analysis of phase three trial became the main market theme on Wednesday. 

Meanwhile, the data published by the US Census Bureau showed that Housing Starts in October increased by 4.9% and Building Permits stayed unchanged. The initial market reaction caused the S&P 500 Futures to retreat from session tops helped the greenback recover some of its daily losses.

At the moment, the US Dollar Index is virtually unchanged on a daily basis at 92.42 and the S%P 500 Futures are up 0.16%.

There won't be any other macroeconomic data releases in the remainder of the day and investors will keep a close eye on Wall Street's performance. If US stocks struggle to stage a convincing rebound in the second half of the day, NZD/USD could edge lower toward 0.6900.

Technical levels to watch for