• Markets early this week are still “risk off” as President Trump stated he wasn’t interested in extending the truce with Iran. Oil prices have traded higher with uncertain sentiment.
• The US Dollar (USD) was under pressure to start the week, dropping to a 3-month low as punters weigh up Fed rate hikes.
• A softer US Retail Sales print for July at -0.6% surprised markets with the number much lower than June’s 0.1%, the worst sales month since May 2025.
• CPI in the US y/y declined last month based on falls in oil and gas prices. Consumer prices increased 3.4% from last years 3.5%, this should leave the Fed less confident to hike rates pending 1 further inflation and jobs report before the 17 September announcement.
• The RBA held their interest rate at 4.35% for the second straight meeting with the board saying they would need to hike again if inflation risks worsen. July 26th Inflation will be the key release, for now most expect the central Bank to hold into 2027. The next RBA dates are 29th October 2nd November and 7th December.
• The strongest main board currency last week was the Canadian Dollar (CAD) while the worst performing currency was the Japanese Yen (JPY).
It has been a settled start to the trading week with the New Zealand Dollar (NZD), US Dollar (USD) bouncing around 0.5890 levels just off 10-week highs. Friday’s US Non-Farm Payroll release came in poor with a contraction in the jobs market shedding 23,000 jobs in July far worse than the 80,000 markets had predicted. This has raised questions around fading Federal Reserve rate hike expectations and renewed inflation and geopolitical risk around the Strait of Hormuz and lack of any meaningful agreement. This week’s US inflation report Thursday morning NZT should show 3.5% y/y before NZ inflation expectation forecast prints. The kiwi could struggle to reach 0.6000 over the week.
Current Level: 0.5881
Support: 0.5850
Resistance: 0.5920
Last week's range: 0.5856- 0.5905
Lower highs followed by lower lows in the Australian Dollar (AUD), New Zealand Dollar (NZD) cross suggest the AUD has firmly been in charge over the last 2 weeks. The kiwi recovered off last week’s 0.8265 (1.2100) level to claw back losses to 0.8335 (1.2000) before consolidating around 0.8305 (1.2040) this morning. Markets are pricing in a 90% chance the Reserve Bank of New Zealand (RBNZ) will hike the cash rate at their next meeting on 2 September. Australian unemployment prints Thursday.
Current Level: 0.8301
Support: 0.8250
Resistance: 0.8390
Last week's range: 0.8263-0.8371
Current Level: (1.2037)
Support: (1.1920)
Resistance: (1.2120)
Last week's range: (1.1945-1.2101)
Volatility late last week in the New Zealand Dollar (NZD), British Pound (GBP) saw prices post 0.4320 (2.3140) and back to 0.4355 (2.2970). Into Tuesday the Pound looks to have the edge as we view a close below the 100-day moving average suggesting a possible downside theme for the kiwi. UK CPI y/y prints this week and could come in significantly higher than 2.6% in July which could force the Bank of England (BoE) to hike rates sooner.
Current Level: 0.4356
Support: 0.4312
Resistance: 0.4385
Last week's range: 0.4320-0.4368
Current Level: (2.2956)
Support: (2.2815)
Resistance: (2.3190)
Last week's range: (2.2889-2.3147)
The New Zealand Dollar (NZD) sits just below the weekly open trading into Tuesday around 0.5100 (1.9600) levels against the Euro (EUR). Market risk off tone has seen the Euro outperform with ongoing uncertainty in the Strait of Hormuz with President Trump saying he wasn’t interested in extending the truce with Iran. With no tier one data this week we could see the NZD drift lower on geopolitical woes towards 0.5140 (1.9450).
Current Level: 0.5096
Support: 0.5050
Resistance: 0.5120
Last week's range: 0.5056-0.5108
Current Level: (1.9623)
Support: (1.9540)
Resistance:(1.9800)
Last week's range: (1.9577-1.9776)
The Australian Dollar (AUD) has extended last week’s move higher against the US Dollar (USD) to clock 0.7125 in early morning trade. The bull channel from late June is very much still in play with the Aussie posting a fresh 10 week high. Widening divergence in central bank activity is still partly causing the decline of the USD with the RBA still hawkish while the Fed are now expected to only hike possibly once over the rest of 2026. Certainly, weaker US inflation and July’s decline in Retail Sales have contributed. Fed minutes is Thursday.
Current Level: 0.7107
Support: 0.7040
Resistance: 0.7180
Last week's range: 0.7038- 0.7095
Prices in the Australian Dollar (AUD), British Pound (GBP) cross have crossed below key channel support at 0.5230 (1.9120) to post 0.5220 (1.9150) this morning. Setbacks in the Aussie we think could be well supported this week backed by expectations the RBA could be release a hawkish hold at 4.35%. The central bank is widely predicted to leave rates unchanged based on persistent inflation and a resilient jobs market. A retest of the zone around prior highs at 0.5245 (1.9060) looks favourable.
Current Level: 0.5221
Support: 0.5175
Resistance: 0.5265
Last week's range: 0.5192-0.5244
Current Level: (1.9153)
Support: (1.9000)
Resistance: (1.9320)
Last week's range: (1.9068-1.9258)
The Australian Dollar (AUD) continues to carve out a big picture uptrend against the Euro (EUR) with prices at 0.6140 (1.6290) this morning just off the pivotal 0.6155 (1.6250) zone. A break past this level and we could certainly retest the long term high at 0.6200 (1.6125) of November 2024. Aussie job numbers and unemployment Thursday should give us more clues on how the RBA review interest rates out to the end of 2026.
Current Level: 0.6138 (1.6291)
Support: 0.6060 (1.6250)
Resistance: 0.6155 (1.6500)
Last week's range: 0.5990- 0.6135 (1.6299- 1.6694)
Current Level: 0.6138
Support: 0.6060
Resistance: 0.6155
Last week's range: 0.5990-0.6135
Current Level: (1.6291)
Support: (1.6250)
Resistance: (1.6500)
Last week's range: (1.6299-1.6694)
The Direct FX app has been updated to include currency charts and the highs/lows for the past 24 hours. Along with our regular market commentary, the Direct FX app also has live indicative market mid rates and a currency conversion calculator. Use the relevant link below to take you directly to the version for you, or simply search for it in the App store / Play store.
