NZD/USD surrenders early gains to 1-1/2 week tops

   •  Fails to capitalize on the early uptick despite the prevalent USD selling bias.
   •  Risk-on mood/US-China trade optimism does little to impress bullish traders. 

The NZD/USD pair surrendered all of the early modest gains to 1-1/2 week tops and is currently placed at the lower end of its daily trading range, just above mid-0.6700s.

The pair built on Friday's goodish bounce from near four-month lows and touched an intraday high level of 0.6783 amid the prevalent US Dollar selling bias, albeit the positive momentum already seems to have lost the steam.

The greenback remained depressed at the start of a new trading week and was being weighed down by the US President Donald Trump's latest criticism, blaming the Fed's monetary tightening for slowing economic growth. 

This coupled with improving risk sentiment on the back of renewed US-China trade optimism and signs that the Chinese economy is regaining momentum further underpinned perceived riskier currencies - including the Kiwi.

Despite the positive factors, the pair failed to capitalize on the intraday positive momentum as investors now seemed reluctant to place any aggressive bets ahead of the quarterly release of NZ CPI figures on Wednesday.

Investors this week will also confront a slew of important macro data from China and the US, which might further collaborate towards determining the pair's next leg of a directional move.

In the meantime, today's US economic docket, featuring the only release of Empire State Manufacturing Index, will be looked upon for some short-term trading impetus later during the early North-American session.

Technical levels to watch

Any subsequent slide might continue to find some support near the 0.6725-20 region, below which the pair is likely to challenge the 0.6700 handle before eventually dropping to test YTD daily closing lows, around mid-0.6600s.

On the flip side, the 0.6780 region now seems to have emerged as immediate resistance and is closely followed by the 0.6800 handle, which if cleared might trigger a short-covering bounce towards the 0.6835-40 supply zone.