NZD/USD climbs above 0.7200 for the first time since April 2018

• NZD/USD extends its daily rally in early American session.
• US Dollar Index pushes lower as US stocks trade in the green.
• US' trade deficit widened to $84.82 billion in November.

The NZD/USD pair gained traction during the early trading hours of the American session and advanced to its highest level since April 2018 at 0.7209. As of writing, the pair was trading at 0.7204, up 0.8% on a daily basis.

USD selloff continues on Wednesday

The selling pressure surrounding the greenback remains intact in the second half of the day with major equity indexes in the US starting the day on a firm footing. At the moment, the Dow Jones Industrial Average is up 0.55% on the day and the US Dollar Index is losing 0.4% at 89.64.

Earlier in the day, the US Census Bureau reported that the trade deficit in November widened by $4.4 billion to $84.8 billion. Other data from the US revealed that Pending Home Sales declined by 2.6% in November. Nevertheless, these disappointing figures were largely ignored by market participants and the sentiment remains upbeat into the new year.

On Thursday, the official Non-Manufacturing and Manufacturing PMI data from China will be looked upon for fresh impetus. Market expectation is for both sectors to continue to expand in December and the China-proxy kiwi could preserve its strength on strong readings.

Technical levels to watch for