NZD/USD drops to near 2-month lows, challenges 200-DMA ahead of NFP

   •  Extends the post-RBNZ sharp retracement slide from levels beyond 0.6900 mark.
   •  Bulls seemed unimpressed a softer tone surrounding USD//US-China trade optimism.
   •  All eyes remain glued to today’s important release of the latest US monthly jobs report.

The NZD/USD pair quickly reversed an early European session uptick to an intraday high level of 0.6765 and dropped to fresh multi-week lows in the last hour.

The pair extended last week's post-RBNZ sharp retracement slide from levels beyond the 0.6900 handle and remained under some selling pressure on Friday - marking its sixth down day in the previous eight.

Bulls failed to gain any respite from the recent optimism over a possible resolution to the protracted US-China trade disputes, rather took cues from the prevalent cautious mood around European equity markets.

Even a subdued US Dollar price action failed to lend any support or stall the slide to its lowest level since Feb. 13, though the bearish pressure now seems to have receded near the very important 200-day SMA.

Market participants now seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of today's release of the keenly watched US monthly jobs report - popularly known as NFP.

Apart from the headline print, investors keep a close eye on average earnings growth, which might influence the near-term USD price dynamics and eventually provide some fresh directional impetus to the major.

Technical levels to watch

A follow-through selling has the potential to accelerate the slide further towards challenging the 0.6700 round figure mark before the pair eventually drops to test YTD daily closing lows, around the 0.6655 region. On the flip side, the 0.6765-70 region now seems to have emerged as an immediate resistance, above which a bout of short-covering might lift the pair further towards reclaiming the 0.6800 round figure mark.