Sample Category Title

Daily Pivots: (S1) 145.94; (P) 146.46; (R1) 147.09; More...

USD/JPY is still bounded in range of 142.66/148.01 and intraday bias remains neutral. On the upside, firm break of 148.01 resistance will resume the rise from 139.87 to 61.8% retracement of 158.86 to 139.87 at 151.22. However, break of 142.66 will bring deeper fall back to retest 139.87 low.

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.

Daily Pivots: (S1) 1.3530; (P) 1.3589; (R1) 1.3651; More...

Intraday bias in GBP/USD remains neutral for the moment. Correction from 1..3787 might extend lower, but downside should be contained by 1.3369 support to bring rebound. On the upside, above 1.3680 minor resistance will bring retest of 1.3787. Firm break of 1.3787 will resume larger up trend to 100% projection of 1.2099 to 1.3206 from 1.3138 at 1.3813.

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 1.2985) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.7941; (P) 0.7968; (R1) 0.7983; More….

Intraday bias in USD/CHF remains neutral as consolidations from 0.7871 is still in progress. Stronger recovery cannot be ruled out, but upside should be limited by 0.8054 support turned resistance to bring another fall. Below 0.7871 will extend the larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757. Firm break there will pave the way to 100% projection at 0.7313 next.

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.

Daily Pivots: (S1) 0.6493; (P) 0.6526; (R1) 0.6562; More...

AUD/USD is staying in consolidation below 0.6589 and intraday bias remains neutral. Overall, further rally is still expected as long as 0.6372 support holds. On the upside, firm break of 0.6589 will resume the rise from 0.5913 and target 0.6713 fibonacci level.

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).

Daily Pivots: (S1) 1.3636; (P) 1.3666; (R1) 1.3692; More...

No change in USD/CAD's outlook as corrective pattern from 1.3538 is in the third leg. Intraday bias stays mildly on the upside for 1.3797 resistance and possibly above. On the downside, firm break of 1.3538/55 support zone will confirm resumption of whole decline from 1.4791.

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.

Daily Pivots: (S1) 0.9316; (P) 0.9341; (R1) 0.9358; More....

Intraday bias in EUR/CHF remains neutral as range trading continues. On the upside, break of 0.9428/45 resistance zone will resume the rebound from 0.9218. On the downside, break of 0.9305 will bring retest of 0.9218 low instead.

In the bigger picture, while downside momentum has been diminishing as seen in W MACD, there is no sign of bottoming yet. EUR/CHF is still staying below 55 W EMA (now at 0.9433) and well inside long term falling channel. Outlook will stay bearish as long as 0.9660 resistance holds. Break of 0.9204 (2024 low) will confirm resumption of down trend from 1.2004 (2018 high).

Daily Pivots: (S1) 0.8602; (P) 0.8622; (R1) 0.8647; More...

EUR/GBP is staying in consolidations below 0.8668 and intraday bias stays neutral. Further rise is expected as long as 0.8506 support holds. Above 0.8668 will target a retest on 0.8737 high. Decisive break there will resume the whole rise from 0.8221 low.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the downside from 0.9267 (2022 high). But even if it's a correction, firm break of 0.8737 will still pave the way to 61.8% retracement of 0.9267 to 0.8221 at 0.8867.

Daily Pivots: (S1) 1.7890; (P) 1.7975; (R1) 1.8041; More...

Intraday bias in EUR/AUD stays neutral and more consolidations could be seen. But further rally is expected as long as 1.7872 support holds. Above 1.8094 will target 161.8% projection of 1.7245 to 1.7705 from 1.7459 at 1.8203. Firm break there will target 1.8554 resistance. However, sustained trading below 1.7872 will turn bias back to the downside for 1.7459/7705 support zone instead.

In the bigger picture, price actions from 1.8554 medium term 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.

Daily Pivots: (S1) 171.20; (P) 171.61; (R1) 172.30; More...

Intraday bias in EUR/JPY remains on the upside at this point. Current rise from 154.77 should target 138.2% projection of 154.77 to 164.16 from 161.06 at 174.03. On the downside, below 169.86 minor support will turn intraday bias neutral and bring consolidations first, before staging another rise.

In the bigger picture, price actions from 175.41 (2024 high) are seen as correction to up trend from 114.42 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. Meanwhile, decisive break of 175.41 will confirm long term up trend resumption.

• As widely expected, the RBNZ left the OCR at 3.25%.
• No vote was required although there remains a split in views among MPC members.
• The Bank’s commentary suggests a presumption that the OCR will be cut in August subject to data evolving as it expects.
• Data on core inflation pressures and inflation expectations are likely to be key in making or breaking the case for an August cut.
• Westpac continues to expect a final 25bp cut at the August MPS meeting.

As had seemed likely given the RBNZ’s commentary at the May Monetary Policy Statement (MPS), and as close to fully priced by markets, the RBNZ today announced that it had decided to leave the OCR at 3.25%. The decision was reached by consensus with no vote taken.

More importantly, regarding the outlook for policy at future meetings, we think that the RBNZ’s commentary indicates a reasonably strong presumption that the OCR will be cut at the August meeting.

The general view of the Monetary Policy Committee (MPC) is that the economic and inflation outlook remains broadly like that presented in the May MPS. Near-term inflation pressures seem a touch stronger than seen in May, but the RBNZ’s medium-term view remains one where mid-target inflation remains the most likely prospect by early 2026.

Risks remain but don’t seem much difference in magnitude or balance compared to the RBNZ’s thoughts back in May. Hence there remains a sense that one to two more 25bp cuts is still high in the minds of the MPC. Perhaps the hawks would see the risks as being in the zero to one cut range where the doves might see at least one, perhaps two 25bp cuts to occur by early next year.

Westpac expects a 25bp rate cut on 20 August, but not guaranteed.

Looking ahead, data that might be most likely to derail the August easing would be signs of continued strong core inflation as well as rising inflation expectations indicators (first half of August). It’s also possible that the recent weakness seen in high frequency activity indicators doesn’t persist in the July and August reads that will be available before the 20 August meeting. Finally, the MPC remains concerned about the potential for global risks to spill over to New Zealand. Should evidence continue to accumulate that these risks are reducing (the MPC seems not to recognise any reduction in global risks right now) then that might point in the direction of holding the OCR unchanged in August.

On balance though, the 25bp cut in August looks like the best bet for now (perhaps a 70% probability). Hence, we are not changing our forecast for one final cut at the August MPS to 3%.

Notable quotes from the RBNZ.

Of note, in the press statement and record of meeting the RBNZ stated the following:

• “The Committee discussed the options of cutting the OCR by 25 basis points to 3 percent or keeping the OCR on hold at 3.25 percent at this meeting.”
• “The case for lowering the OCR at this meeting highlighted weak near-term growth momentum and the risk of prolonged weakness in economic activity from excess caution by households and businesses in the face of economic uncertainty.”
• “The case for keeping the OCR on hold at this meeting highlighted the elevated level of uncertainty, and the benefits of waiting until August in light of near-term inflation risks.”
• “The economic outlook remains highly uncertain. Further data on the speed of New Zealand’s economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the Official Cash Rate”.
• “Subject to medium-term inflation pressures continuing to ease in line with the Committee’s central projections, the Committee expects to lower the Official Cash Rate further, broadly consistent with the projection outlined in May.”
• “While inflation is expected to approach the top of the target band in Q2 and Q3 of 2025, spare productive capacity and declining core inflation are consistent with headline inflation returning to the midpoint over the medium term. The Committee noted that the outlook for medium-term inflation pressures in New Zealand has evolved broadly in line with the May MPS projections.”
• “The Committee noted that there were upside and downside risks to the medium-term outlook for inflation. With higher inflation expected in the near term, some members underlined a risk that this could lead to more persistently elevated price- and wage-setting behaviour….However, other members emphasised the large negative output gap, moderate wage inflation and job insecurity, and continued weakness in house prices.”

There was little reaction in either interest rate markets or the NZ dollar, suggesting that the RBNZ’s commentary largely met expectations.

Key things to watch ahead.

Looking ahead to the 20 August MPS, the key domestic economic indicators to watch are:

• The Q2 CPI (released 21 July) and July Selected Prices (15 August). We currently expect the CPI to rise 0.6%q/q in Q2, compared to the RBNZ’s May forecast of 0.5%q/q.
• The Q2 labour market surveys (released 6 August). We currently expect that the unemployment rate will rise 0.2ppts to 5.3%, compared to the RBNZ’s May forecast of 5.2%, with filled jobs data suggesting that employment will likely disappoint the RBNZ’s forecast of 0.2%q/q.
• The Q3 RBNZ Survey of Expectations (released 7 August) and Q3 RBNZ Survey of Business Expectations (released 18 August), with a particular emphasis on the inflation expectations measures in these surveys following a lift in Q2.

In addition to these major quarterly releases, we expect the RBNZ will pay close attention to the developments in the BusinessNZ PMIs, consumer spending, housing market and migration (reports for June released in mid- July and for July in mid-August). The various activity and inflation indicators contained in the ANZ business and consumer confidence surveys (released late July) will also be of interest.

Aside from domestic economic data, developments in US tariff policy and any clarity regarding how this is impacting the outlook for trading partner growth and inflation will also have an impact on the RBNZ’s deliberations at the August meeting. Movements in prices for New Zealand’s key commodity exports will be important in gauging the extent to which less favourable international conditions are beginning to impact the economy.