• United States and Iran have made significant progress in peace talks with further discussions to be held this week. Markets haven’t completely turned “risk on” with negotiation risk weighing on market sentiment.
• The Federal Reserve (FED) left interest rates unchanged yesterday at 3.75% last week with the new Fed Chair Warsh delivering his first statement. Voting unanimously in favour 12-0 for a hold with Warsh terminating the Fed’s “easing” bias. We expect the Federal Reserve Bank to hold interest rates over the course of 2026.
• The Strait of Hormuz has been opened.
• Crude Oil fluctuations remain the theme of late but has settled around 73.00 key levels.
• NASDAQ falls 1.3% overnight to 26166 with Amazon leading the way down 4.75%.
• UK Prime Minister Starmer announced he would step down giving way to Andy Burnham, the former Mayer of Manchester. Starmer has been under massive pressure from his own Labour party after heavy local election losses.
• UK Retail Sales for the month of May rose to 1.2% compared to 0.5% markets were expecting highlighting expensive fuel prices. Questions are now being raised around the Bank of England (BoE) rate cut bets.
• The Australian Dollar (AUD) has opened the week in the best form amongst the main board players while the Japanese Yen (JPY) is the worst performer, again.
The New Zealand Dollar (NZD) has fallen to 0.5710 levels against the US Dollar (USD) a fresh 11 week low. It trades close to support at 0.5680 the yearly low in the cross. Last week’s failed upside moves to 0.5860 met rejections as the Fed retain their hawkish view. The kiwi is the weakest major currency as it lacks decent support heading into the week. The Strait of Hormuz is now open to shipping but has not been fully normalised. Although negotiations have gone well markets however have been reluctant to celebrate to soon with negotiations still ongoing. On the docket this week is US GDP q/q expected to print at 1.6% in line with the December quarter. Attention on the chart now lies with the key 0.5680 level and if the NZD can avoid a retest of this zone.
Current Level: 0.5704
Support: 0.5670
Resistance: 0.5750
Last week's range: 0.5722- 0.5862
The New Zealand Dollar (NZD) has continued its run lower against the Australian Dollar (AUD) reaching fresh 4-week lows around 0.8165 (1.0225) this morning. We view a mildly hawkish RBA after they left rates unchanged last week at 4.35% against a less positive RBNZ. Punters are taking advantage of the interest rate differential rather than the geopolitical backdrop. The growth outlook in Australia has been outperforming that of NZ leaning towards a stronger currency. 0.8145 (1.2280) support from April 2013 is still the target.
Current Level: 0.8160
Support: 0.8145
Resistance: 0.8245
Last week's range: 0.8177-0.8280
Current Level: (1.2246)
Support: (1.2130)
Resistance: (1.2280)
Last week's range: (1.2076-1.2229)
UK CPI y/y prints Wednesday night before NZ GDP q/q Thursday morning holds our focus this week. A weakening New Zealand Dollar (NZD) Monday has prices trading around 0.4340 (2.3035) just off the long-term lows against the British Pound (GBP). Sticky UK inflation may continue to prop up the GBP for a while however we should get a good look at how the Bank of England (BoE) perceives economic signals when they meet Thursday night to review policy. No change from the 3.75% is expected however the member voting should tell a story. A retest at 0.4315 (2.3180) is our call this week.
Current Level: 0.4337
Support: 0.4315
Resistance: 0.4360
Last week's range: 0.4325-0.4373
Current Level: (2.3057)
Support: (2.2930
Resistance: (2.3180)
Last week's range: (2.2865-2.3121)
The New Zealand Dollar (NZD) has been under pressure this week with price dropping to 0.5000 (2.000) key support. A “big figure” breach should bring into play the key level at 0.4945 (2.0230). With a relatively strong Eurozone outlook albeit undetermined inflation risks, this has underpinned the EUR over recent days. Eurozone Manufacturing data prints tonight and could give us swings.
Current Level: 0.4993
Support: 0.4945
Resistance: 0.5020
Last week's range: 0.5000-0.5050
Current Level: (2.0028)
Support: (1.9930)
Resistance:(2.0230)
Last week's range: (1.9801-2.0000)
The Australian Dollar (AUD) dropped below key support this morning at 0.7000 against the US Dollar (USD) to 0.6996. Any bearish continuation throws the AUD/USD into 11-week lows. The RBA’s hold at 4.35% was seen as a hawkish pause on tightening rather than a shift to easing, with further rate hikes possible if inflation proves sticky. Concerns over the middle east conflict continue to weigh on the AUD as well with broader risk sentiment reducing demand. Attention turns to Australian CPI y/y with predictions this will rise from April’s 4.2%
Current Level: 0.6989
Support: 0.6970
Resistance: 0.7070
Last week's range: 0.6988- 0.7088
Click here for AUDUSD charts
The British Pound (GBP) continued to make ground against the Australian Dollar Monday reaching 1.8930 (0.5280). The AUD slump may be based on a number of factors, the first being profit taking on the run up to 0.5320 (1.8800) levels. The RBA’s recent decision to leave rates unchanged at 4.35% has been perceived as being a hawkish pause rather than an end of rate rising with further hikes possible if inflation becomes persistent. On the calendar this week is Aussie job numbers and CPI y/y to watch.
Current Level: 0.5276
Support: 0.5235
Resistance: 0.5320
Last week's range: 0.5256-0.5317
Current Level: (1.8953)
Support: (1.8800)
Resistance: (1.9100)
Last week's range: (1.8807-1.9025)
Early week moves in the Euro (EUR), Australian Dollar (AUD) saw a shift off 0.6110 (1.6370) to 0.6130 (1.6310) clearing the zone around 0.6125 (1.6330). With the RBA still relatively hawkish and the ECB further well into its easing cycle we may see further improvements for the AUD as it carves out longer term momentum after a failed run down to 0.6060 (1.6500) in recent weeks. Focus is firmly on this week’s Australian CPI y/y out tomorrow before job’s numbers Thursday. Both should give us a read on economic forecasts.
Current Level: 0.6115
Support: 0.6060
Resistance: 0.6180
Last week's range: 0.6078-0.6131
Current Level: (1.6353)
Support: (1.6190)
Resistance: (1.6500)
Last week's range: (1.6308-1.6452)
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.
