NZD/USD defends 0.7100 handle

Having posted a session high just below mid-0.7100s, the NZD/USD pair turned lower and dipped below 0.7100 handle before recovering quickly to currently trade around 0.7130 region. 

After an initial tepid recovery, the pair came under renewed selling pressure amid increasing bets of an eventual Fed rate-hike action, which tends to weigh on higher-yielding currencies - like Kiwi. CME groups, FedWatch Tool is currently pricing in over 85.0% probability of such an action in December.

The pair, however, found some support at lower levels as the greenback, as measured by the overall US Dollar Index, witnessed some profit taking move following its recent up-move to the highest level since Dec. 2, 2015, touched on Monday. 

Tuesday's key focus would be on GDT Price Index along with US economic docket featuring the release of monthly retail sales and Empire State Manufacturing Index. 

Technical levels to watch

A follow through selling pressure below 0.7100 handle is likely to drag the pair immediately towards 0.7070 support (Monday's low) below which the slide could further get extended towards the very important 200-day SMA support near 0.7020 region. Meanwhile on the upside, sustained move above 0.7140 immediate hurdle is likely to boost the pair towards 0.7170 level en-route 100-day SMA resistance near 0.7210 region.