The Aussie enters this week with genuine hawkish backing after Australia’s Q2 GDP surprised sharply to the upside, pushing the market-implied probability of a September RBA hike from 48% to 57%, with a November move now more than fully priced. Governor Bullock’s board has already flagged upside inflation risks tied to Middle East-driven energy costs, and rising Australian bond yields, which touched their highest level since April 2011 this week, are only reinforcing that hawkish backdrop.
Across the Tasman, the RBNZ delivered exactly what all five major New Zealand bank economists expected on Wednesday: a 25bp hike to 2.75%, the second consecutive increase after July’s tightening move. Headline inflation remains elevated at 4.1%, though the central bank’s own projections signal a likely pause in October before potentially resuming in December, leaving markets pricing roughly a 30% chance of another hike this year.
The result: two central banks now both firmly in tightening mode, though the RBA’s path still carries more near-term uncertainty than the RBNZ’s, whose next move already looks broadly telegraphed through year-end.
Technical Analysis of AUD/NZD
As the AUD/NZD chart shows, the pair staged a sharp rally from the 1.19633 low, riding a steep ascending trendline that has powered the entire late-August advance. That rally has since run into resistance near the 1.22897 high, the 0 Fibonacci level, where price is now consolidating just above the 0.236 retracement near 1.22127, caught between a shorter-term descending trendline from this week’s peak and the broader medium-term descending trendline that has capped the pair since late June.
Bullish Scenario
Should buyers defend the 0.236 retracement and the ascending trendline while breaking above the short-term descending trendline, the path would open towards a retest of the 1.22897 high. A confirmed break above that level would mark a genuine shift in the broader multi-month structure.
Bearish Scenario
Conversely, a break below the 0.236 level and the steep ascending trendline would expose the intermediate 1.213–1.215 support zone, coinciding with the 0.5 Fibonacci retracement. A deeper slide below that zone would risk a fuller retracement of the late-August rally, back towards the 0.618–0.786 area near 1.203–1.209.
With price squeezed between a reclaimed short-term trendline, a defended ascending trendline, and the long-term descending trendline, AUD/NZD looks poised for a decisive move. Will the RBA’s hawkish momentum push the pair through resistance, or will the broader downtrend since June reassert control?
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
In our last video, we looked at how a desperate move by the US Treasury to buy more long-dated US bonds hurt USD.
Let’s take a look at the aftermath.
In today’s Market Outlook, let’s take a look at Forex trading on NVIDIA, Gold, XAU/USD, USD/CAD, CAD/CHF, AUD/NZD, and AUD/USD.
We have been following several USD pairs and buying the dip on pairs like AUDUSD when price reaches the lower trend line.
This trend line might be changing now, as global economies are losing confidence in USD.
For example, we often use the stochastic oscillator to signal reversals, with the trend, and we can use ADX to confirm.
When we see the red DI- line quickly turn down, it usually means that the short-term retracement has exhausted itself.
You may have seen our videos on using these indicators to spot price reversals after news events in our News Catalyst Fade, and we may get a chance tomorrow with Australian CPI.
In general, if yearly CPI comes in lower than 3.3%, this may signal to the RBA that they may not have to raise interest rates this year, which will drive AUD lower, against the trend.
Also, we have US PCE and GDP tomorrow so we will probably see good volatility on AUDUSD, but please check other USD and AUD pairs.
For example, we are in a ranging market looking at the AUD/NZD 4-hour chart, and our technicals helped us pick the reversals.
However, the daily chart tells a bit of a different story with AUD looking weaker, contrary to other pairs.
You will note, as well, that all CHF pairs moved last week on news that the SNB will not rule out negative interest rates.
This caused rapid CHF weakness, and the announcement of the US Treasury Bond fiasco caused a reversal, which our indicators spotted nicely.
You will also note a weekend gap on CAD pairs based on the surprise, very unreasonable demands by US trade negotiators over the weekend.
USDCAD saw the same effect and, normally, we would expect a continuation of the downtrend and a gap trade.
However, this is now a fundamental trade, not a technical trade, and the market will be waiting on better news from US/Canada trade talks before we see a stronger Loony.
We see a pullback on Gold.
This is likely just profit-taking, but keep an eye on tomorrow’s US PCE and GDP figures, as many analysts feel that gold is still bullish.
And, if you like to trade US equities, we have NVIDIA earnings tomorrow as well, whose share price has been falling for more than one week.
The Reserve Bank of Australia held the cash rate at 4.35%, with all nine board members voting to leave policy unchanged. The decision itself was expected. The more useful signal came from why the Bank chose to pause.
Inflation is still too high, but consumer spending, housing and the labour market are beginning to cool. After three rate hikes this year, the RBA now wants to see how much of that tightening is still working through the economy before deciding whether another increase is needed.
That leaves the RBA in an awkward middle ground: not enough evidence to hike again immediately, but not enough disinflation to declare the tightening cycle finished. For AUD, the next move is therefore a confirmation story rather than a simple hawkish-rate story.
The RBA is pausing to assess, not declaring victoryThe latest statement suggests the RBA believes tighter policy is starting to have a real effect. Trimmed mean inflation remains elevated, but softer consumer spending, cooler housing conditions in some capital cities and a softer labour market all point to demand losing some momentum.
That is why the hold should not be read as a dovish pivot. The Bank can keep policy restrictive while waiting for the lagged effect of earlier hikes. If inflation remains sticky, or global energy risks keep price pressures elevated, the option of another hike remains open.
For AUD, this is supportive at the margin, but it is not a one-way bullish signal. The currency still has to prove that the RBA backdrop is strong enough to overcome resistance and whatever the US dollar does next.
AUD/USD now has to clear 0.704-0.708AUDUSD is now testing the 0.704-0.708 resistance area on the daily chart. Price has pushed into a previous high range, but the latest candles are beginning to stall and momentum has failed to confirm the higher high.
From here, the US side of AUDUSD becomes the next immediate driver, with US CPI due tomorrow on 12 August.
A hotter US inflation print would make it harder for AUDUSD to break higher. The first pullback references sit near the channel midline around 0.700 and the lower channel area near 0.695. A clean channel failure would expose the larger 0.683-0.687 support zone.
A cooler US CPI print would give the pair more room to break above 0.708. If price can close above that area and hold it on a retest, the next references are around 0.718 and then 0.723-0.727.
Fundamentally, the RBA is in a much more comfortable position than earlier in the year.
Softer housing activity, lending, consumer spending and labour conditions suggest its previous hikes are beginning to cool demand, which should gradually ease inflation pressure. Technically, AUDUSD may also be forming bearish divergence at resistance.
RBNZ shows a hawkish policy is not enoughThe RBNZ offers a useful warning against treating a hawkish central bank as an automatic bullish currency signal. It raised the Official Cash Rate to 2.50% on 8 July and said further increases are likely, although the timing remains uncertain.
Even so, NZD/USD remains below its long-running weekly downtrend and beneath the 0.603-0.612 resistance area. The pair has not converted renewed RBNZ tightening into a structural breakout of its trendline resistance.
That makes NZD/USD a control case for the RBA story. Domestic policy can support a currency, but relative growth, commodity exposure, the US dollar and existing price structure still decide how much of that support reaches the exchange rate.
AUD/NZD may be reaching a turning pointRemoving the US dollar from the equation, the RBA may finally be starting to see its aggressive tightening cycle pay off.
Housing activity and new lending have cooled, consumer spending has slowed, and labour conditions have softened, giving the Bank more reason to pause and assess the impact of the three hikes delivered between February and May.
The RBNZ, on the other hand, is at a much earlier stage. It only restarted tightening in July, raising the OCR to 2.50%, with further hikes still likely. That timing gap matters because Australia may now be moving into the later stages of its tightening cycle just as New Zealand begins applying more pressure.
If that gap starts to narrow, so could Australia’s relative rate advantage. That raises the risk that AUDNZD is approaching a turning point rather than simply extending higher.
The idea that AUD may weaken against the NZD is supported technically as well.
The pair has tapped a major trendline resistance extending from 2019 with almost perfect precision. The current pullback could still form a bull-flag consolidation, but failure to recover would leave room for a deeper retracement towards roughly 1.162-1.169, where the trading volume weighted average price anchored from the start of the rally sits.
The Aussie and the Kiwi are telling two very different monetary policy stories right now, and the divergence is starting to show up clearly in the cross. The RBA held its cash rate at 4.35% in August, but the hawkish tone that once dominated has faded fast: Q2 inflation cooled to 3.9% from 4.1%, prompting Goldman Sachs to abandon its call for one final hike this year. Markets now price next to no chance of an August move, with only roughly even odds of a hike by November.
Across the Tasman, the RBNZ is playing a different game entirely. Having already hiked to 2.50% in June, the central bank has kept its guidance firmly hawkish, and markets are now almost fully pricing a further 25bp increase in September. Wednesday’s employment data added an interesting twist: employment change q/q beat expectations sharply at 0.5% against 0.1% forecast, yet the unemployment rate also rose to 5.6% from 5.4%, above forecasts—a genuinely mixed print that complicates the otherwise hawkish RBNZ narrative.
The result: a Reserve Bank stepping back from further tightening against one still leaning hawkish, though now facing a labor market sending conflicting signals of its own.
Technical Analysis of AUD/NZD
As AUD/NZD chart shows, the pair broke above the 100-period EMA back in July and is now testing this level again, right where it converges with the 0.5 Fibonacci retracement near 1.2011-1.2013. This confluence marks a critical juncture after weeks of steady decline.
Bullish Scenario
Should buyers break this EMA-Fibonacci confluence decisively, the path would open toward the 0.618 retracement near 1.2037, followed by the descending trendline, which itself converges with the 0.786 level around 1.2073. A break above this second confluence would leave room to retest the 1.2200-1.2250 resistance, the upper boundary of the broader range that has trapped price since April..
Bearish Scenario
Conversely, a rejection at the EMA-0.5 confluence would send price back down to retest the 1.1900-1.1950 support, the level that has held since March.. This is the real test: a confirmed break below it would open the door to a more sustained and decisive downtrend.
With price wedged right at this pivotal confluence, and the broader March-to-August range still very much intact, AUD/NZD looks ready to decide whether it’s building toward a genuine breakout, or simply setting up for another rejection within its months-long range.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
Improving risk sentiment helped lift the Australian dollar after easing Middle East tensions and stronger US economic data. While AUD/USD, AUD/JPY and AUD/NZD all advanced, each cross is approaching important technical levels that could determine whether the rally extends or fades.
View related analysis:
Gold Price Outlook: Can Quiet Accumulation Trigger a Breakout? Japanese Yen Outlook: USD/JPY Plunge Loses Steam, but Risks Remain USD at a Crossroads: Can EUR/USD and AUD/USD Extend Their Gains? FX Futures Positioning: Yen, Euro Bears Caught Short | COT report Risk Sentiment Drives the Australian Dollar Higher Middle East Optimism Lifts Global Risk Sentiment Prospects that the Strait of Hormuz could reopen boosted risk appetite on Tuesday, lifting Wall Street sentiment. ISM manufacturing PMI also edged higher to 55.6 from 53.3. Employment expanded, new orders ticked higher and prices paid ticked lower, albeit from elevated levels. The S&P 500 and Dow Jones reached record highs, while the Nasdaq closed in on 30,000. The SPI 200 rose 0.4% overnight, which should see the ASX 200 gap higher and place its all-time high within a day's typical trading range.
Antipodeans Lead as Yen Lags AUD/USD and NZD/USD were the strongest FX majors as the antipodeans embraced the positive lead from the Middle East headlines. Whether that proves to be another false start, however, risks reversing that sentiment. The Japanese yen was the weakest FX major, although its losses were marginal as traders likely remained wary of betting against the combined might of the MOF and the Fed. USD/JPY edged higher in line with yesterday's bias, although resistance emerged around the first zone, which includes the 200-day moving averages near 157.80. I suspect bears are seeking evidence of swing highs around resistance levels, with 158.00, 159.00 and 159.40 the main contenders.
Source: LSEG
Australian Dollar Technical Setups AUD/USD Presses Against Key Resistance The Aussie has so far held up well against the US dollar's mild bullish retracement. Given the AU-US two-year yield spread has risen so far this week, perhaps a breakout is on the cards in the near term. For now, AUD/USD continues to respect the June VPOC as resistance, and even if bulls break above it, they still have the monthly R1 pivot point and the June 15 high to contend with. A break above 0.7100 could provide the first real test of this risk-on rally.
For now, however, my bias remains for a swing high to form and for AUD/USD to snap its four-week winning streak. The RBA seems unlikely to hike again this cycle, while futures traders continue to increase their bearish bets against the Australian dollar, according to recent Commitment of Traders (COT) data.
Source: ICE, TradingView
AUD/JPY Bounce Faces Heavy Resistance After its worst five-day run in 15 months, AUD/JPY found support at its 200-day moving averages and formed a bullish engulfing day. Under normal circumstances, this could provide the foundation for a decent rebound, but traders are right to remain wary of betting against the Japanese yen too aggressively given the scale of currency intervention over the past week. I therefore suspect that, as with USD/JPY, bears may be looking to fade rallies around resistance levels.
Tuesday's high stalled around the July low, the 111.00 handle and the prior intervention level. The monthly pivot point also sits just beneath the 112.00 handle, while the July VPOC is near 112.50. Ultimately, bears have several notable resistance levels to monitor for evidence of a potential swing high.
Source: ICE, TradingView
AUD/NZD Bears Defend the 1.20 Handle The Aussie is in a clear downtrend against the Kiwi dollar on the daily chart, although it is trying to form a swing low. Monday's bearish outside candle met resistance at the 1.20 handle before closing beneath the March low, although Tuesday's bullish inside day suggests a tentative attempt to form a trough.
Today's New Zealand employment figures could determine whether hawkish RBNZ bets help push AUD/NZD towards the 200-day moving averages at 1.1556, or whether bulls have another crack at 1.20. But until we see a break or daily close above 1.20, risks remain skewed to the downside, with a break beneath the 200-day moving averages bringing 1.18 into focus.
TL;DR: With markets already convinced the RBA is done hiking, tomorrow’s New Zealand employment report matters less for whether the RBNZ turns more hawkish and more for whether the labor market stays resilient enough to keep its tightening bias intact — a dynamic already pressuring AUD/NZD lower.
Why the Focus Has Shifted Across the Tasman Markets have already reached a broad consensus that the Reserve Bank of Australia has finished tightening for this year. The focus is now shifting across the Tasman, where the Reserve Bank of New Zealand still appears to have work left to do. That makes tomorrow’s second-quarter employment report less about whether the RBNZ will turn more hawkish, and more about whether the labor market is resilient enough to keep its existing tightening bias intact.
Inflation Already Made the Case for More Tightening The case for further tightening was largely established by inflation. New Zealand’s second-quarter CPI rose 4.1% y/y, exceeding the RBNZ’s 3.9% forecast and reminding policymakers that price pressures remain more persistent than expected. More importantly, non-tradable inflation held at an elevated 3.4%, indicating domestic inflation — not just higher fuel costs linked to the Middle East conflict — continues to pose a challenge.
Stronger business sentiment since then has only reinforced that picture, with July’s ANZ Business Confidence jumping to 56.1 from 36.6.
Why Tomorrow’s Data Doesn’t Need to Surprise Against that backdrop, tomorrow’s labor market data don’t need to surprise on the upside to support the policy outlook. Consensus forecasts call for:
Employment growth of 0.1% q/q. Unemployment edging up from 5.3% to 5.4%. The Labour Cost Index accelerating from 0.5% to 0.6% q/q. Those figures are broadly consistent with the RBNZ’s own projections, meaning an in-line report would leave the Bank’s economic assessment largely intact. Instead of weakening the tightening narrative, it would reinforce the view that policy still needs to move somewhat further into restrictive territory to contain domestic inflation and limit second-round effects from higher energy prices.
What Would Actually Move Markets The bigger market reaction would likely come from a stronger-than-expected report. Faster employment growth, firmer wage inflation, or a lower unemployment rate would strengthen the case for another hike as early as September, and increase expectations that the Official Cash Rate ultimately reaches the upper end of the 2.75%–3.00% range currently expected by many economists. Only a materially weaker labor market would cast meaningful doubt on that outlook, by suggesting higher borrowing costs are beginning to bite more sharply than anticipated.
Why This Matters for AUD/NZD Those shifting policy expectations have become important for AUD/NZD. Australia’s softer-than-expected second-quarter CPI has persuaded markets the RBA is likely to keep the cash rate unchanged at 4.35% through year-end, effectively ending a period in which Australian rate expectations consistently outpaced those in New Zealand. With the RBA sidelined, investors are now watching whether the RBNZ can narrow the policy differential through further tightening, providing fundamental support for the New Zealand Dollar against its Australian counterpart.
ActionForex’s Technical View on AUD/NZD The technical picture complements the macro story. AUD/NZD’s decline from 1.2283 continues to look like a correction of the five-wave advance from 1.0649. As long as 1.2119 resistance caps rebounds, the bias remains lower. The next downside objective remains the 38.2% retracement at 1.1658, which sits just above the previous fourth-wave consolidation around 1.1412–1.1634.
Against a backdrop of narrowing policy differentials, tomorrow’s New Zealand labor market report has the potential to provide the catalyst for the next leg lower in AUD/NZD.
Key Takeaways New Zealand’s Q2 CPI beat the RBNZ’s own forecast at 4.1% y/y, with sticky non-tradable inflation at 3.4% keeping the tightening bias intact. Consensus expects tomorrow’s employment data to come in broadly in line with RBNZ projections, meaning an in-line print alone would reinforce, not weaken, the hawkish case. A stronger-than-expected report would raise September hike odds and support an Official Cash Rate move toward the top of the 2.75%-3.00% range. Australia’s softer CPI has convinced markets the RBA is done hiking, shifting the AUD/NZD policy narrative fully toward the RBNZ’s next move. AUD/NZD’s decline from 1.2283 remains capped below 1.2119 resistance, with 1.1658 the next downside objective if the labor data supports further RBNZ tightening.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Goldman Sachs sees scope for AUD/NZD to retreat over the medium term as stronger New Zealand inflation revives RBNZ rate-hike expectations, despite near-term support from higher energy prices. Analysts at Goldman Sachs expect the Australian Dollar to New Zealand Dollar exchange rate (AUD/NZD) to correct lower over the medium term, although higher energy prices may continue to support the cross in the immediate outlook.
AUD/NZD was trading around 1.2098 on Monday, up approximately 0.3% on the day. The pair has fallen around 0.7% since the beginning of July but remains more than 4% higher in 2026.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.907748 (+0.30%)
Pound to Dollar (GBP/USD): 1.330182 (+0.09%)
Australian Dollar to US Dollar (AUD/USD): 0.697252 (-0.20%)
The bank said AUD/NZD has recently been “buoyed up” by the rise in global energy prices, reflecting Australia’s more favourable commodity exposure and the relative resilience of the Australian Dollar during periods of higher raw-material costs.
Goldman nevertheless believes that monetary-policy developments in New Zealand could ultimately place renewed downward pressure on the cross.
New Zealand inflation surprised firmly to the upside, with consumer prices rising 1.5% quarter-on-quarter and annual inflation accelerating to 4.1%.
The stronger reading has led Goldman Sachs to revise its Reserve Bank of New Zealand outlook. The bank now expects the RBNZ to raise interest rates in September, followed by a final 25-basis-point increase in December.
That would take the Official Cash Rate to 3.00%, creating a stronger rate backdrop for the New Zealand Dollar and narrowing one of the key sources of support for AUD/NZD.
The shift is important because the cross has spent much of 2026 benefiting from a widening contrast between expectations for Australian and New Zealand monetary policy.
Stronger New Zealand inflation now challenges that narrative by increasing the likelihood that the RBNZ will need to tighten policy further to prevent price pressures becoming entrenched.
Australian inflation data will provide the next major test for the outlook.
A stronger-than-expected Australian CPI reading could reinforce expectations that the Reserve Bank of Australia will also need to maintain a restrictive policy stance, potentially extending near-term support for the Australian Dollar.
Energy prices remain another source of uncertainty. Australia is a major commodity exporter, meaning higher energy and raw-material prices can improve the country’s terms of trade and support the currency.
This helps explain why Goldman is cautious about expressing its bearish AUD/NZD view through a short-dated trade.
Medium-Term AUD/NZD Forecast: Goldman Prefers Longer-Dated Puts Rather than betting on an immediate decline, Goldman Sachs prefers longer-dated AUD/NZD put options to express its expectation that the cross will eventually move lower.
The strategy is designed to manage the risk of sharp near-term volatility surrounding Australian inflation data and further energy-price shocks.
In practical terms, longer-dated puts allow investors to retain exposure to a future AUD/NZD decline without relying on the correction beginning immediately.
The bank’s central view is that higher energy prices can keep the cross supported in the short run, but a renewed RBNZ tightening cycle should become increasingly important over the medium term.
With AUD/NZD still trading above 1.20 and recording a sizeable year-to-date gain, Goldman sees scope for some of that strength to unwind as markets price a higher New Zealand interest-rate path.
The immediate direction will depend on Australian CPI and commodity markets, but the prospect of two additional RBNZ increases strengthens the case for the New Zealand Dollar to recover against its Australian counterpart over the months ahead.
As we all know, the Iran war is severely restricting the flow of Crude Oil through the Strait of Hormuz.
Saudi Arabia started to send more tankers out via the Red Sea, but now, we have a completely different set of problems in the Bab al-Mandab Strait, which is driving crude even higher.
In today’s Market Outlook, let’s take a look at Forex trading on EURNZD, NZDUSD, AUDUSD, AUDNZD, AUDCAD, Silver, XAGUSD, Gold, XAUUSD, WTI, and Brent Crude Oil.
So, the question for traders is, “when can we go short on WTI and Brent CFDs and watch price action fall to normal levels?”
There is no easy answer to this question, but the current US administration is under enormous pressure to end the war, but that may mean nothing in the short term.
This has caused more geopolitical uncertainty, and investors tested the $4,000 level of support on gold, with price heading up past $4,100 this week.
Silver followed gold, as it has been doing for months.
On the technical side, price action has broken through the upper trend line that we have been following for months.
On the weekly charts, we see falling wedges, which are almost always bullish patterns.
But keep in mind, these are weekly charts, so this may take a long time to play out.
This morning we saw Australian Employment Figures way higher than analysts’ expectations, and look what happened.
If we follow the rules of the News Catalyst Fade, we want to trade with the trend or within the range.
We note that in almost every case, the news drove price action WITH the trade buy; we can still look for reversals on other time frames.
We will keep an eye on AUDUSD, for example, where price is at a key level of resistance.
Also on AUDNZD, we see price at a key level with an overbought stochastic oscillator.
And, on AUDCAD, we see a strong ranging market with price at an upper trend line and an overbought stochastic oscillator.
Please feel free to check all other AUD pairs.
We see that NZD has been the strongest currency this month, but we also see that this may be changing.
For example, on NZDUSD, we see a pullback through the lower trend line, but we also see a falling wedge and an oversold stochastic oscillator.
Inflation in New Zealand is not under control, so we will keep an eye on all NZD pairs.
On EURNZD, we see the pullback as well, but with price action forming a rising wedge, and we will keep an eye on this as well.
And tomorrow’s ECB Interest Rate decision, so keep an eye on these and all EUR pairs.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.
Headline inflation beats, underlying pressures easing Tradables prices undershoot RBNZ's forecast September RBNZ hike likely, longer-term pricing looks excessive NZD/USD bulls retain technical advantage above support AUD/NZD breakdown keeps sellers firmly in control A beat, but with important caveats New Zealand consumer prices rose 1.5% in the June quarter, lifting the annual inflation rate to 4.1%. While that was above the 4.0% increase expected by economists, it fell just short of the Reserve Bank of New Zealand's 4.2% forecast released in May.
That suggests inflation remains uncomfortably high and is likely to keep the RBNZ on course to tighten policy further. However, the underlying details were more encouraging, with the broadest measure of core inflation easing further and domestic price pressures evolving broadly as the central bank had anticipated.
The composition of the report was arguably more important than the headline. While annual inflation accelerated, much of the increase reflected higher tradeable prices, which are influenced by developments offshore rather than domestic demand.
Source: FOREX.com, RBNZ, StatsNZ
Tradeable inflation accelerated to 4.9% over the year, driven largely by a 27.5% jump in petrol prices and a 71.0% surge in other vehicle fuels and lubricants. However, that was well below the RBNZ's 5.6% forecast, explaining why headline inflation also undershot the central bank's expectations.
By contrast, non-tradeable inflation, which is viewed as a better gauge of domestically generated price pressures, eased to 3.4% and matched the RBNZ's forecast. Electricity and local authority rates provided the largest upward pressure, while lower real estate services prices helped offset some of the increase.
The broadest measure of underlying inflation, CPI excluding the food group, household energy subgroup and vehicle fuels, also continued to ease, slipping to 2.5% from 2.6%. While it remains in the upper half of the RBNZ's 1–3% target band, the continued moderation suggests underlying inflation pressures are still moving in the right direction rather than becoming more entrenched.
Traders should now watch the release of the RBNZ's Sectoral Factor Model at 3pm Wellington time. The measure, which strips out temporary price movements to provide another gauge of underlying inflation, printed at 2.7% in the March quarter and could influence moves in New Zealand financial markets should it deliver a meaningful surprise.
What it means for the RBNZ
Source: Bloomberg
When all said and done, today's report is unlikely to materially alter the RBNZ's near-term thinking. Inflation remains above target and the central bank has already adopted an explicit tightening bias. Another 25 basis point increase in September still looks very likely and is close to fully priced, with the risk of a second move by October also deemed slightly more likely than not ahead of November's general election.
Further out, though, market pricing looks far too punchy. Overnight index swaps continue to imply close to five additional quarter-point increases by May next year, taking the OCR to around 3.75%.
That profile looks too aggressive given the broader economic backdrop. While inflation remains high, underlying price pressures continue to ease and there is still ample slack in the labour market, with little evidence that wage growth is accelerating in a way that would warrant taking policy deep into restrictive territory.
The next major test for that view will come on 13 August, when the RBNZ releases its latest Survey of Expectations. Of particular interest will be the two-year inflation expectations measure, which climbed to 2.53% in May from 2.37% previously.
Another meaningful acceleration would strengthen the case for additional tightening, potentially even a 50 basis point move, which can't be ruled out given some of the hawkish rhetoric from external members of the Monetary Policy Committee. But if inflation expectations fail to accelerate again, it would cast doubt on the degree of tightening currently priced into the OIS curve.
At face value, today's report may be interpreted as hawkish given headline inflation exceeded economists' forecasts. I'm not convinced that's the right read. The underlying detail tells a different story, particularly with the broadest measure of core inflation continuing to ease and tradables inflation coming in well below the RBNZ's own forecast.
That's just one of several factors to consider when assessing directional risk for the Kiwi dollar. While domestic rates remain an important driver, recent price action has also become increasingly sensitive to broader risk appetite and changes in US interest rate expectations. Starting with NZD/USD, here's how the technical picture stacks up.
The battleground for Kiwi bulls
Source: TradingView
The RBNZ's hawkish tilt has helped support NZD/USD over recent weeks, allowing the pair to reclaim a cluster of key medium and long-term moving averages.
For now, though, it's a game of ping-pong. Buyers continue to emerge on dips towards the 100-day moving average, while rallies are being capped ahead of resistance at 0.5860. That's the initial range to watch.
The oscillators continue to favour the bulls. RSI (14) remains comfortably above the neutral 50 level at 63, while MACD has crossed above its signal line and remains in positive territory.
Should the pair break decisively above 0.5860, the next upside level to watch is 0.5920, an area that repeatedly acted as both support and resistance during April, May and June. Above that, attention shifts to 0.5992, the double top established earlier this year.
On the downside, initial support is provided by the 100, 200 and 50-day moving averages, along with horizontal support at 0.5796, another level that has repeatedly acted as both support and resistance in recent weeks. A break beneath the latter could open the door for a retracement towards 0.5747, with 0.5724 and the uptrend from the June lows the next levels to watch.
Breakdown keeps bears in control
Source: TradingView
As flagged earlier this month, AUD/NZD has broken below the uptrend from the June 2025 lows, with the pair also slipping beneath the 50 and 100-day moving averages. Along the way, it took out support at 1.2053 and 1.2000 before finding buyers at 1.1950.
For now, the pair is stuck in a narrow range between 1.2000 and 1.1950. We did see a bullish engulfing candle print on Monday following renewed upside in energy prices as the conflict in the Middle East escalated. However, that has not generated follow-through buying, with rallies continuing to stall ahead of 1.2000.
The message from the oscillators remains bearish. RSI (14) continues to set lower highs and sits well below the neutral 50 level at 33. That bearish message is being reinforced by MACD, which remains below its signal line and in negative territory.
Selling rallies and downside breaks remains the preferred strategy. Should the pair break decisively beneath 1.1950, there is little in the way of technical support until the 200-day moving average at 1.1835, followed by 1.1797, former resistance before February's upside breakout.
Should the pair reclaim 1.2000, the next upside levels to watch are 1.2053, followed by the confluence of the 100-day moving average and resistance at 1.2115. For now, though, selling rallies and downside breaks remains the preferred strategy.
From a fundamental perspective, with New Zealand's inflation report now out of the way, attention will quickly shift to Australia's labour force report on Thursday. Alongside broader risk sentiment, the release is likely to be influential on markets' assessment of the directional risks for the RBA cash rate moving forward.
Only a week after the Reserve Bank of New Zealand suggested lower oil prices would help ease inflation, one of its most senior policymakers is already questioning that assumption. Chief Economist Paul Conway’s latest remarks have given the New Zealand Dollar another boost, as investors conclude that the recent rebound in energy prices could require the RBNZ to tighten policy further than markets anticipated just days ago. That shift is now pushing AUD/NZD toward the neckline of an important double top, with the cross reflecting diverging monetary policy paths on either side of the Tasman.
Conway’s speech, “Finding Signal in the Inflation Noise“, acknowledged that falling oil prices had initially eased near-term inflation pressures. However, he argued the recent resurgence in Middle East tensions has delivered “another significant inflation shock” and warned that inflation may not slow as quickly as the RBNZ’s own forecasts suggest.
More importantly, he pointed to structural changes in New Zealand’s pricing behavior. New research from the central bank indicates businesses are passing higher costs through to consumers more readily than in the past while proving less willing to reverse those increases when costs decline. If that behavior alters inflation expectations, Conway said, “monetary policy may need to respond more firmly to re-anchor inflation expectations,” while cautioning that well-anchored expectations “cannot be taken for granted.”
Markets responded by bringing forward expectations for further tightening. Overnight index swaps now imply the Official Cash Rate rising from current 2.50% to around 3.0% by December, with another increase expected early next year. That marks a notable shift from the narrative surrounding last week’s policy decision, when lower fuel prices had encouraged expectations that the RBNZ could move only gradually after delivering its first rate hike in three years. The rebound in oil prices has quickly forced investors to reassess that outlook.
The implications are particularly clear in AUD/NZD. While the Reserve Bank of Australia has already delivered three rate hikes this year and is widely expected to adopt a slower, more measured pace, the RBNZ is viewed as having more ground to make up. That narrowing policy gap provides a strong fundamental backdrop for continued New Zealand Dollar outperformance.
The technical picture is beginning to reinforce that macro story. AUD/NZD has already shown signs that the five-wave rally from 1.0649 has run its course, with bearish divergence emerging on D MACD. Focus is now squarely on the 1.1970 neckline. A decisive break would confirm a double top at 1.2283 and 1.2256, opening the way toward 38.2% retracement of 1.0649 to 1.2283 at 1.1659.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Manufacturing survey delivers blockbuster upside surprise RBNZ tightening cycle gains fresh credibility RBA rate expectations continue to unwind AUD/NZD technical breakdown gains momentum NZD/USD breakout shifts focus higher New Zealand may be on holiday, but the Kiwi dollar certainly wasn't on Thursday. It topped the G10 FX leaderboard after strong data reinforced the RBNZ's message from earlier this week that further rate hikes are likely.
Factory floor fires up The catalyst for the outperformance was a blockbuster BNZ PMI. The headline index surged to 59.7 in June, its highest reading since July 2021. Excluding the pandemic rebound, it was the strongest result since May 2017, underpinned by a sharp lift in new orders, production, deliveries and employment. Respondents reported stronger sales, growing order books and renewed confidence, outweighing concerns about Middle East tensions and cost-of-living pressures.
A hawkish roadmap The survey's release was timely, arriving just days after the RBNZ lifted its cash rate to 2.5%, the first increase of a new tightening cycle. Policymakers retained a hawkish bias, saying "some further reduction in monetary stimulus is likely to be required" to return inflation sustainably to the 2% target midpoint.
Speaking after the decision, RBNZ Governor Anna Breman said they were "feeling our way" as they sought to identify New Zealand's neutral cash rate, the level where it is neither stimulatory nor restrictive on economic activity. She suggested it may sit somewhere between 2.5% and 3.5%, implying 3% may be the Bank's initial destination for policy.
Mind the gap That’s important because relative rate expectations have long been one of the key macro drivers for AUD/NZD, making recent shifts in pricing on either side of the Tasman particularly important.
Source: Bloomberg
While the RBNZ has just embarked on a fresh tightening cycle, the RBA is likely much closer to the end of its own, or perhaps already there, after lifting its cash rate three times, unwinding the easing conducted in 2025. Although it has left the door open to further increases, softer domestic economic data and easing energy prices have seen markets scale back expectations for additional tightening. Just a few months ago, traders were flirting with the idea that the cash rate may need to near 5%. Today, there's only around an even chance of another 25 basis point increase to 4.60%.
Source: Tradingview
Thursday's data saw the Australia-New Zealand two-year yield spread compress by 14 basis points, the largest one-day decline since March 9. While the catalyst was New Zealand's stronger-than-expected manufacturing PMI, the broader narrowing in spreads has been driven just as much by the steady unwinding of hawkish RBA pricing over recent months.
Connecting the dots The rates relationship is evident in the correlation matrix below, with Australia-New Zealand two-year yield spreads maintaining a consistently positive correlation with AUD/NZD across the past week, month and quarter.
Source: Tradingview
Energy prices have also been somewhat influential. While both Australia and New Zealand are heavily reliant on imported petroleum, Australia is also one of the world's largest LNG exporters. It's perhaps no surprise then that AUD/NZD has also maintained a strong positive correlation with LNG prices over the past month, particularly over the past week, reflecting the terms of trade impact of fluctuations in gas prices on the Australian dollar.
AUD/NZD trendline snaps
Source: Tradingview
It's not only fundamentals that are pointing to the risk of Kiwi outperformance against the Australian dollar, with the technical picture increasingly aligning with that view. Thursday saw AUD/NZD break below its June 2025 uptrend, doing so emphatically while also slicing through the 100-day moving average, a level it had remained above since July last year.
The breakdown follows the formation of a series of lower highs and the completion of what resembles an evening star bearish reversal after the pair spent several sessions flirting with the 50-day moving average earlier this week. The question now is whether Thursday's breakdown attracts another wave of selling on Friday.
The immediate focus is the June 10 low at 1.2053. Should that give way, attention shifts to 1.2000, a level that's repeatedly acted as both support and resistance in recent months, followed by 1.1950. Below that sits the 23.6% Fibonacci retracement of the May 2025-June 2026 bull move, a level the pair also spent considerable time trading around back in March. The 200-day moving average at 1.1813, sitting just above the former breakout level at 1.1797, shapes as a more ambitious downside target.
Overhead, the broken June 2025 uptrend and 100-day moving average, located just below 1.2100, combine with horizontal resistance at 1.2115 to create an important resistance zone should buyers attempt to regain control.
Momentum indicators continue to favour the bears. RSI (14) is trending lower below 50 without yet reaching oversold territory, while MACD has crossed below its signal line and continues to diverge in negative territory, favouring selling into strength and downside breaks.
NZD/USD triangle delivers
Source: Tradingview
There are also signs the improving backdrop is beginning to spill over into NZD/USD. As noted yesterday, the pair was threatening to break higher from an ascending triangle, a move that's since played out through the European and North American sessions.
The breakout shifts the focus to 0.5774, a level that's repeatedly acted as both support and resistance this year. A sustained move above there would bring a cluster of key moving averages into view, starting with the 50-day moving average at 0.5815. While the 50-day moving average has recently crossed below the 200-day moving average, completing a death cross, that signal is being overridden by the improving fundamental backdrop and recent price action. Should that view prove misplaced and a retracement unfold, the former breakout level at 0.5724 is the first area to watch for support.
Momentum indicators point to the potential for further gains. RSI (14) continues to trend higher and has reclaimed the neutral 50 level, while MACD has completed a bullish crossover. Although it remains below zero, it's continuing to push higher, suggesting the bearish momentum that dragged NZD/USD to fresh 2026 lows in late June has dissipated and may be in the early stages of reversing, pointing to the potential for an extension of Thursday's breakout.
AUD/NZD declines after three days of gains, trading around 1.2170 during the Asian hours on Wednesday. The currency cross falls nearly 0.25% as the New Zealand Dollar (NZD) gains ground following the release of the interest rate decision by the Reserve Bank of New Zealand (RBNZ).
The RBNZ raised its Official Cash Rate (OCR) by 25 basis points to 2.50% at its June policy meeting, matching widespread market expectations. According to the central bank's Monetary Policy Review, further reductions in monetary stimulus will likely be necessary to steer inflation back to its 2% target midpoint as economic activity strengthens. The RBNZ noted that future OCR adjustments will remain strictly data-dependent, guided by incoming economic indicators, price-setting behavior, and medium-term inflationary pressures.
Meanwhile, Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter highlighted that the Australian economy remains resilient despite recent oil price shocks denting consumer and business confidence.
Hunter reiterated the RBA's commitment to taking necessary action to curb inflation and maintain sustainable full employment. Despite this hawkish reminder, financial markets continue to price in a pause for the August meeting, expecting the RBA to hold its cash rate steady after delivering three interest rate hikes earlier this year.
RBNZ FAQs The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment.
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.
Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says.
In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.
