NZD/USD sitting on key channel support, eyes for 0.6885?

Currently, NZD/USD is trading at 0.7001, up 0.11% on the day, having posted a daily high at 0.7006 and low at 0.6991.

NZD/USD is testing a critical support area and the downside of the late March sideways channel formed with the double bottom on 23rd and 24th.
The focus is back to Central Banks with the Fed predicted to hike rates again as soon as June while the RBNZ is expected to remain on hold for a considerable period and potentially for the rest of the year.

US data reviewed, supporing the greenback - Nomura

Analysts at Westpac noted that at its March interest rate decision, the RBNZ kept the OCR on hold at 1.75% as fully expected. "The statement was received very calmly, as it showed little change from February." In respect to price, they say there is potential for higher to the 0.7150-0.7300 area during the month ahead, as USD longs are pared. "Further out, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900." We have the GDT price index next week as next major catalyst domestically and the analysts suggested that weaker dairy prices, along with the RBNZ’s emphatic reminders it is on hold for a long time, should also weigh.

NZD/USD levels

On the downside, a break here opens the 0.6885 mark as being the recent lows guarding 0.6675 as the 29th May 2016 on a break of the 0.67 handle. On the flipside, we have the 0.7022 resistance and 200 hourly EMA guarding 0.7085 and the 200-d ema. There is a double bottom at 0.7130 as the mid-Feb lows.