NZD/USD falls to over one-week lows, challenging 100-DMA support

The NZD/USD pair remained under some selling pressure for the second straight session and has now dropped to near 1-1/2 week lows, in the 0.7230 region.

The pair extended previous session's NZ election result-led sharp retracement move from 50-day SMA hurdle and was being further weighed down by today's dismal trade balance figures for August. New-Zealand recorded a larger than expected trade deficit of $1235 million in August, worse than previous month's surplus of $98 million (revised higher from $85 million reported earlier). 

   •  NZ merchandise trade reviewed - Westpac

Meanwhile, a modest pickup in the US Dollar demand, despite fresh geopolitical concerns, further collaborated to the pair's heavily offered tone through early European session on Tuesday.

Against the backdrop of growing NZ political uncertainty, investors now look forward to RBNZ decision on Thursday for some fresh directional impetus. 

   •  NZD: Political uncertainty to prevail as RBNZ meets - ING

Ahead of the key event risk, today's US economic data and the Fed Chair Janet Yellen's speech would influence rate hike expectations and drive sentiment surrounding higher-yielding currencies - like the Kiwi.

   •  NZD/USD: Mildly negative bias over the medium-term - ANZ

Technical levels to watch

Immediate support is pegged near 0.7215-10 area, below which the pair is likely to accelerate the slide towards 0.7175 intermediate support before eventually dropping to the very important 200-day SMA support near the 0.7150-45 region.

On the upside, any recovery attempts might now confront immediate resistance near 0.7260-65 zone, which if cleared could lift the pair back beyond the 0.7300 handle towards 50-day SMA strong barrier near the 0.7325-30 region.