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EURNZD: ⬇️ Sell

• EURNZD reversed from the resistance area
• Likely to fall to support level 1.9400

EURNZD currency pair recently reversed down from the resistance area between the major long-term resistance level 1.9655 (which has been reversing the price from the start of 2020) and the upper weekly Bollinger Band.

The downward reversal from this resistance area stopped the previous medium-term impulse wave (5).

Given the strength of the resistance level 1.9655, EURNZD currency pair can be expected to fall to the next support level 1.9400.

Markets showed surprising composure last week as equities climbed and Dollar dominate FX rankings. NASDAQ’s relentless ascent and a fresh record for the S&P 500 highlighted investor confidence despite growing political noise and tariff tensions.

Elsewhere in FX, Euro and Sterling held firm, along with Loonie but were largely lifted by relative outperformance. Meanwhile, Aussie found itself at the bottom of the currency board after a grim jobs report. Yen and Kiwi didn't flare better, with the former suffering selloff ahead of this weekend's elections. Swiss Franc ended in the middle.

Solid Data Anchor Risk Sentiment Despite Swirl of Uncertainty

US equities remained resilient last week, with NASDAQ extending its record-breaking run and S&P 500 also registering a fresh record high before ending Friday flat. While DOW showed signs of stalling, the broader tone in risk assets held up surprisingly well. This came despite a swirl of uncertainty—ranging from trade war to speculation that President Donald Trump was preparing to fire Fed Chair Jerome Powell. Additionally, a combination of solid data supported expectations that Fed won’t act rashly on rate cut. But investors were generally unfazed.

The bullish sentiment was partly supported by solid economic data out of the US. Retail sales surprised to the upside with a 0.6% month-over-month gain, with ex-auto sales up 0.5%—pointing to resilient consumer spending despite mounting price pressures. Initial jobless claims also improved, falling to 221k, the lowest level in three months. Together, these indicators painted a picture of a still-solid economy.

While Fed Governor Christopher Waller doubled-down on his push for a July rate cut, most policymakers emphasized risks from tariff-driven inflation. The majority's cautious stance was supported by the late inflation data. Headline CPI accelerated to 2.7% in June, with core inflation rising to 2.9%. The data confirmed that the pass-through from tariff-related input costs is reaching the consumer level.

Indeed, Fed’s own Beige Book flagged increasing cost pressures from tariffs, with many firms planning to pass those through to consumers. The report warned that consumer prices could begin rising more quickly by late summer. That concern echoed through multiple Fed speeches, with Atlanta Fed’s Raphael Bostic warning June CPI could be an “inflection point.

All in all, the picture is that there is no imminent urgency for Fed to cut interest rates again. And the inflation risk ahead, due to tariffs to take effect after August 1, should keep Fed on guard again resurgence in inflation.

Pricing for a hold at this month’s meeting remains above 95%. Odds for a September cut have fallen to just over 50%, down from nearly 60% last week. For now the more dovish path for Fed this year would be just two rate cuts, one in September and one in December. The more hawkish path with be just one cut in December, or probably no cut at all.

Technically, NASDAQ (closed at 20895.65) is now closer to an important resistance zone, between 61.8% projection of 10088.82 to 20204.58 from 14784.03 at 21035.56, and long term channel top at around 21370. Rejection by this zone, followed by break of 20492.62 support, will bring near term correction first. However, sustained break of the resistance zone could prompt upside acceleration to 100% projection at 24899.78 within the second half of the year.

As for Dollar Index, rebound from 96.37 short term bottom continued last week. Immediate focus is on 55 D EMA (now at 98.91). Sustained break there will bring stronger rise back to 101.97 resistance, which is slightly above 38.2% retracement of 110.17 to 96.27 at 101.64, even still as a corrective move.

More importantly, while it's still early, it should be pointed out again that Dollar Index is close to decade long channel support (now at around 96). Sustained trading above 55 W EMA (now at 101.29), will argue that whole down trend form 114.77 has completed as a three wave correction.

Euro, Sterling Hold Ground as Others Struggle

Euro and Sterling ended the week firmer, though still under the shadow of a dominant US Dollar. Support came partly from domestic data surprises, but more importantly, from relative weakness in other major currencies—particularly the Aussie which suffered on poor jobs data, and Yen due to pre-election selloff.

In the Eurozone, optimism returned as Germany’s ZEW Economic Sentiment index jumped to 52.7 in July, marking a third straight month of gains. ZEW cited hopes of a US-EU trade breakthrough, though such optimism may prove premature. However, reports indicate Trump is now pushing for a 15–20% minimum tariff in any deal, with the threat of a 30% blanket tariff still lingering. These signals suggest the EU is far from out of the woods.

Sterling, meanwhile, found modest support in hotter-than-expected UK inflation data. Headline CPI rose to 3.6% in June, while core CPI accelerated to 3.7%. Most notably, goods inflation ticked up to 2.4%, indicating that trade-linked price pressures are beginning to filter through. This gives the BoE’s hawkish members additional ground to resist deeper or faster rate cuts. With the BoE already on a quarterly cut path, the latest inflation data make it more difficult for doves to push for a more aggressive easing cycle.

Technically, EUR/GBP's extended rally from 0.8534 is starting to lose steam, as seen in D MACD, ahead of 0.8737 resistance. Break of 0.8607 support should indicate short term topping in the cross. Further break of 55 D EMA (now at 0.8541) will suggest near term reversal, and the pattern from 0.8737 should have then started the third leg back towards 0.8354.

Aussie Sinks as RBA Cut Bets Surge After Jobs Shock

Aussie finished the week as the worst-performing major, defying the broader risk-on tone that saw global equities and commodities extend gains. Australia's own ASX 200 index surged to record highs, highlighting the divergence between local asset strength and AUD’s poor performance.

The shift in sentiment was driven by the disappointing June employment report. Headline jobs growth came in at just 2k, with a sharp drop in full-time employment and a rise in the unemployment rate to 4.3%. The data shocked markets and led traders to fully price in an RBA rate cut for August. Some are now questioning whether the central bank erred in holding policy steady in July.

With inflation also under watch, the upcoming Q2 CPI report could be decisive. Should it reveal a clear loss of momentum in prices, the case for policy easing would strengthen further. A deteriorating labor market combined with soft inflation could set the stage for an accelerated rate-cut cycle—something the RBA has so far been hesitant to entertain.

AUD/USD was the top mover last week, losing -1.06%. While AUD/USD recovered after diving to 0.6453, thanks to extended risk rally, risk will stay on the downside as long as 0.6593 short term top holds. Fall from there is tentatively seen as a correction to rise from 0.5913. Deeper fall should be seen to 38.2% retracement of 0.5913 to 0.6594 at 0.6334 before completion.

USD/JPY Weekly Outlook

USD/JPY finally broke out of range last week to resume the rebound from 139.87. But as a temporary top was formed at 149.17, initial bias stays neutral this week first. On the upside, break of 149.17 will target 100% projection of 139.87 to 148.64 from 142.66 at 151.43. That is close to 61.8% retracement of 158.86 to 139.87 at 151.22.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). There is no clear sign that the pattern has completed yet. But still, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

In the long term picture, there is no sign that up trend from 75.56 (2011 low) has completed. But then, firm break of 161.94 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

EUR/USD's corrective fall from 1.1829 extended lower last week but recovered after hitting 1.1555. Initial bias remains neutral this week first. On the downside, sustained trading below 55 D EMA (now at 1.1488) will argue that it's already correcting the rally from 1.0176, and target 38.2% retracement of 1.0176 to 1.1829 at 1.1198. On the upside, though, break of 1.1720 will bring retest of 1.1829 high.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

In the long term picture, a long term bottom was in place already at 0.9534, on bullish convergence condition in M MACD. Further rise should be seen to 38.2% retracement of 1.6039 to 0.9534 at 1.2019. Rejection by 1.2019 will keep the price actions from 0.9534 as a corrective pattern. But sustained break of 1.2019 will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

USD/JPY finally broke out of range last week to resume the rebound from 139.87. But as a temporary top was formed at 149.17, initial bias stays neutral this week first. On the upside, break of 149.17 will target 100% projection of 139.87 to 148.64 from 142.66 at 151.43. That is close to 61.8% retracement of 158.86 to 139.87 at 151.22.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). There is no clear sign that the pattern has completed yet. But still, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

In the long term picture, there is no sign that up trend from 75.56 (2011 low) has completed. But then, firm break of 161.94 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

GBP/USD dipped to 1.3363 last week but recovered after drawing support from 1.3369. Initial bias remains neutral this week first. On the downside, firm break of 1.3363.9 will suggest that fall from 1.3787 short term top is already correcting the rise from 1.2099. Deeper fall should then be seen to 1.3138 cluster support (38.2% retracement of 1.2099 to 1.3787 at 1.3142). However, strong rebound from current level will retain near term bullishness. Break of 1.3561 support turned resistance will bring retest of 1.3787 high.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3003) holds, even in case of deep pullback.

In the long term picture, for now, price actions from 1.0351 (2022 low) are still seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. However, firm break of 1.4248 resistance (38.2% retracement of 2.1161 to 1.0351 at 1.4480) will be a strong sign of long term bullish reversal.

USD/CHF recovered to 0.8063 last week but failed to sustain above 0.8054 support turned resistance and retreat. Initial bias remains neutral this week first. On the downside, break of 0.7946 support will argue that correction from 0.7871 has completed, and bring retest of this low. Nevertheless, firm break of 0.8054/63 will bring stronger rebound to 55 D EMA (now at 0.8145).

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

In the long term picture, price action from 0.7065 (2011 low) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). It's uncertain if the fall from 1.0342 is the second leg of the pattern, or resumption of the down trend. But in either case, outlook will stay bearish as long as 0.9200 resistance holds. Retest of 0.7065 should be seen next.

AUD/USD's decline last week suggest short term topping at 0.6594. But with recovery from 0.6453, initial bias is turned neutral this week first. Risk will stay on the downside as long as 0.6593 resistance holds. Below 0.6453 will target 38.2% retracement of 0.5913 to 0.6594 at 0.6334, as a correction to the whole rally from 0.5913.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

In the long term picture, fall from 0.8006 is seen as the second leg of the corrective pattern from 0.5506 long term bottom (2020 low). Hence, in case of deeper decline, strong support should emerge above 0.5506 to contain downside to bring reversal. On the upside, firm break of 0.6941 will argue that the third leg has already started back to 0.8006.

USD/CAD's corrective pattern from 1.3538 extended last week with mild recovery. But momentum then stalled after hitting 1.3773. Initial bias is turned neutral this week first. On the upside, above 1.3773 will target 1.3797 and possibly above. On the downside, break of 1.3650 support will bring retest of 1.3538/55 support zone.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

In the long term picture, as long as 55 M EMA (now at 1.3498) holds, up trend from 0.9056 (2007 low) should still resume through 1.4791 at a later stage. However, sustained trading below 55 M EMA will argue that the up trend has already completed, with rise from 1.2005 to 1.4791 as the fifth wave. 1.4791 would then be seen as a long term top and deeper medium term down trend should then follow.

EUR/AUD drew support from the near term channel and 55 D EMA (now at 1.7717) and recovered last week. But momentum quickly faded. Initial bias is turned neutral this week first. On the upside, break of 1.8094 will resume the choppy rise from 1.7245 towards 1.8554 high. However, break of 1.7717 support will revive the case that rise from 1.7245 has completed, and turn bias back to the downside for 1.7459 support instead.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. While deeper pullback might be seen, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Up trend from 1.4281 is expected to resume at a later stage.

In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6365) holds, this second leg could still extend higher.