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Last week's post-US NFP rebound has given NZD/USD some breathing room, but it has done little to convince traders that the recent downtrend has run its course. With the Reserve Bank of New Zealand set to announce its policy decision this week, the Kiwi now faces a catalyst that could determine whether the recovery develops into something more durable or simply marks another pause before sellers return.

The challenge for the RBNZ is that the arguments for both holding and hiking have become increasingly compelling. Inflation has stayed uncomfortably high after this year's oil shock, supporting the case for pushing interest rates back toward neutral sooner rather than later. Yet domestic demand is still subdued, unemployment remains elevated and geopolitical risks have eased following the US-Iran ceasefire, reducing some of the urgency for another immediate tightening move.

That dilemma is reflected across the policy debate. The NZIER Monetary Policy Shadow Board marginally favors leaving the Official Cash Rate unchanged at 2.25%, but characterizes the July meeting as an exceptionally close call. Members supporting a hike cited persistent inflation pressures, while others argued the economic effects of the earlier energy shock and slowing domestic activity justify waiting for greater clarity. Importantly, there is little disagreement over the medium-term direction of policy, with most members expecting the OCR to climb toward 3.00%-3.25% over the next year.

Forecasts from New Zealand's major banks tell a similar story. ANZ and BNZ expect a 25 basis point increase this week, though ANZ believes any move should be accompanied by balanced guidance to avoid boxing policymakers into an overly aggressive tightening path if economic data weakens. BNZ likewise argues inflation risks have not disappeared despite the improvement in global geopolitical conditions.

ASB and Westpac instead expect the RBNZ to stay on hold. ASB reversed its previous forecast for a July increase after the easing of Middle East tensions, while Westpac believes policymakers are now more likely to reach a consensus in favor of waiting than they were at the May meeting. In both cases, the emphasis is on allowing more time to assess whether inflation pressures continue to broaden after the energy shock.

As a result, markets may focus less on the headline decision than on what comes next. A hold that signals another hike is only being delayed could limit downside in the Kiwi. Equally, a 25 basis point increase accompanied by softer forward guidance may fail to generate lasting gains. Investors will be looking for clues on how quickly the RBNZ expects policy to move back toward neutral rather than treating this week's decision in isolation.

Technically, NZD/USD still looks vulnerable. The recovery from last week's lows was driven largely by broad-based Dollar weakness after the softer US employment report rather than a meaningful improvement in New Zealand's outlook. As long as 0.5768 cluster resistance (38.2% retracement of 0.5993 to 0.5625 at 0.5766) continues to cap rallies, the near-term bias stays tilted to the downside. A break below 0.5625 would resume the decline from 0.6092 towards 0.5579 structural support.

The longer-term chart tells a similar story. The price action from the 2025 low at 0.5484 continues to look corrective within the broader downtrend from the 2021 peak at 0.7463. While momentum has not yet confirmed a decisive bearish breakout, sustained trading below 0.5625 would suggest that correction has run its course and increase the likelihood of another test of the 2025 lows.

Key Highlights

• EUR/USD started a recovery wave and tested the 1.1475 resistance.
• A rising channel is forming with support at 1.1395 on the 4-hour chart.
• GBP/USD started a recovery wave and climbed above 1.3300.
• USD/JPY found support near 160.60 and started a fresh increase.

EUR/USD Technical Analysis

The Euro found support near 1.1325 against the US Dollar. EUR/USD started a recovery wave above 1.1350 but faced many hurdles.

Looking at the 4-hour chart, the pair was able to surpass the 38.2% Fibonacci retracement level of the downward move from the 1.1672 swing high to the 1.1324 low. However, the bears remained active near the 1.1675 resistance and the 100 simple moving average (red, 4-hour).

The pair also faced rejection near the 50% Fib retracement level and started a fresh pullback. If there is another decline, the pair might find support near 1.1400.

Besides, there is a rising channel forming with support at 1.1395. The first major support could be near 1.1365. A downside break and close below 1.1365 might send the pair toward 1.1320. Any more losses could open the doors for a test of 1.1250.

On the upside, the bears might remain active near 1.1475. The next major resistance might be 1.1500. A close above 1.1500 could open the doors for a larger increase. In the stated case, the bulls could aim for a move to the 200 simple moving average (green, 4-hour) at 1.1540.

Looking at GBP/USD, the bulls attempted a recovery wave above 1.3300, but they could struggle near the 1.3385 resistance.

Upcoming Key Economic Events:

• Euro Zone Retail Sales for May 2026 (YoY) - Forecast +1.5%, versus +1.0% previous.
• Euro Zone Retail Sales for May 2026 (MoM) - Forecast +0.2%, versus -0.4% previous.
• US ISM Services Index for June 2026 – Forecast 54.2, versus 54.5 previous.

USD/JPY was the main focus for many traders last week, moving above 162 as markets tested the Japanese government’s willingness to intervene. Intervention warnings from Japanese officials, together with rumors that intervention may have started, triggered a quick retracement, although actual intervention was not confirmed.

The key economic data highlight of the week was the U.S. employment report, which came in weaker than expected, with the economy adding only 57,000 jobs in June. This marked a reversal from the recent trend of strong U.S. data, causing the U.S. dollar to weaken and gold to rise. The weaker jobs data also reduced expectations that the Fed may need to raise interest rates again, helping U.S. equities move higher.

In Japan, there was positive economic news as the Tankan survey showed sentiment among large manufacturers improved for a fifth consecutive quarter. The index rose to 22 from 17, its strongest reading since 2018. WTI crude oil was relatively quiet, continuing to test lower as there were no significant headlines to drive prices in either direction.

Markets This Week

U.S. Stocks

Although it was a quieter week due to the U.S. holiday on Friday, the Dow still managed to reach a fresh record high. Weaker-than-expected U.S. employment data lowered interest rate expectations, making stocks more attractive to investors. This week may also remain relatively quiet, but with the market still holding above the 10-day moving average, following the short-term uptrend appears to be the preferred strategy. Resistance levels are at 53,000 and 54,000. Support is seen at 52,000, 51,000, 50,000, 49,500 and 49,000.

Japanese Stocks

The Nikkei came under profit-taking pressure last week, moving back below the important 70,000 level. This was not unexpected given how strongly the market has rallied this year. USD/JPY was supportive at the start of the week as it moved higher, but when the pair later pulled back on fears of possible Japanese intervention, this also weighed on Japanese stocks. The outlook for Japanese equities remains broadly positive, but with the market now below the 10-day moving average, range-trading strategies may be more suitable this week. Resistance is seen at 70,000, 71,000, 72,000, 73,000, 74,000 and 75,000, while support is at 67,500, 66,500 and 65,000.

USD/JPY

USD/JPY started the week strongly, continuing its uptrend as traders focused on the interest rate gap between the U.S. and Japan. However, weaker U.S. employment data and signs that Japanese authorities may intervene without warning caused the pair to turn lower, breaking below the 10-day moving average and triggering a sharp move down on Thursday. Buyers returned near the lower levels, with support holding above 160, but the risks of buying USD/JPY have increased now that the pair is below the 10-day moving average and intervention concerns remain high. At the same time, the interest rate spread still supports the upside, so range trading may be the best approach this week in potentially volatile conditions. Resistance is at 162.00, 163.00 and 165.00, while support is seen at 161.00, 160.50, 160.00, 159.00, 158.00, 157.00, 156.00, 155.50 and 155.00.

Gold

Gold moved lower at the start of last week, once again testing below the $4,000 level as the recent downtrend continued on a stronger U.S. dollar and higher interest rate expectations. However, support held near $4,000 for the second time, forming a double bottom. Weaker-than-expected U.S. employment data then reduced rate hike expectations, which supported gold and pushed the market back above the 10-day moving average. The rebound from the lows was sharp, so some consolidation is possible this week. However, with support holding at $4,000, medium-term traders may look to focus on buying on weakness. Resistance is at $4,200, $4,300, $4,400, $4,500, $4,600 and $4,665, while support is at $4,100, $4,000, $3,900, and $3,800.

Crude Oil

Crude oil remained weak last week, with prices continuing to move lower in quiet market conditions. Traders still expect the Iran conflict to move toward a resolution, and there were no major headlines to support oil prices. The 10-day moving average is still moving lower, so the short-term trend remains bearish. Selling while prices stay below this level may remain the better strategy, but a move back above the 10-day moving average could lead to a quick rebound if new risks from Iran appear. Resistance is at $75, $85, $90, $95 and $100, while support is at $67.50, $65, and $60.

Bitcoin

Bitcoin held recent support early last week before moving higher after weaker-than-expected U.S. employment data lowered interest rate expectations. This was positive for Bitcoin and helped prices move back above the 10-day moving average, breaking the recent short-term downtrend. Overall, the market remains in a range between $55,000 and $65,000, so range trading still appears to be the preferred strategy. However, given how far prices have fallen over the past couple of months, medium-term traders may also look to buy on weakness. Resistance is at $65,000, $75,000, $80,000, $85,000, and $90,000, while support is at $60,000, $55,000 and $50,000.

This Week’s Focus

• Monday: E.U. HCOB Eurozone Construction PMI, U.K. S&P Global Construction PMI, E.U. PPI and Retail Sales, U.S. S&P Global Services PMI and ISM Non-Manufacturing PMI
• Tuesday: Japan Household Spending, U.K. Halifax House Price Index and BoE MPC Meeting Minutes, U.S. Trade Balance
• Wednesday: Japan Current Account, Australia Building Approvals, U.S. FOMC Meeting Minutes
• Thursday: China CPI and PPI, U.S. Existing Home Sales
• Friday: Japan PPI

The week after U.S. employment data is usually quieter, with fewer important data releases. This week, traders may focus on the latest Federal Reserve meeting minutes for clues about future interest rate policy under the new Fed chairman. USD/JPY may also remain volatile as the risk of Japanese intervention to support the yen stays high.

EUR/USD stayed in consolidations above 1.1323 last week and outlook is unchanged. Initial bias remains neutral this week. With 1.1499 support turned resistance intact, further decline is expected. On the downside, break of 1.1323 will resume the fall from 1.2081 to 100% projection of 1.2081 to 1.1408 from 1.1848 at 1.1175. However, decisive break of 1.1499 will turn bias back to the upside for 55 D EMA (now at 1.1559) and above.

In the bigger picture, focus is back on 38.2% retracement of 1.0176 to 1.2081 at 1.1353. Decisive break there will revive the case of medium term bearish trend reversal after rejection by 1.2 key cluster resistance level. Further fall should be seen to 61.8% retracement at 1.0904. Nevertheless, strong rebound from 1.1353, followed by break of 1.1621 resistance, will retain medium term bullishness.

In the long term picture, 38.2% retracement of 1.6039 to 0.9534 at 1.2019, which is close to 1.2000 psychological level is the key for the outlook. Rejection by this level will keep the multi decade down trend from 1.6039 (2008 high) intact, and keep outlook neutral at best. However, decisive break of 1.2000/19, will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

USD/JPY's steep pullback last week confirms short term topping at 162.83. Initial bias stays mildly on downside this week for 38.2% retracement of 155.01 to 162.83 at 159.84. Since this level is close to 55 D EMA (now at 160.00), strong support should be seen from there to bring rebound. On the upside, above 161.63 minor resistance will turn intraday bias neutral. Overall, consolidations should continue below 162.83 for a while.

In the bigger picture, rise from 139.87 (2025 low) is seen as another rising leg of the long term up trend. Next target is 61.8% projection of 139.87 to 159.44 from 152.25 at 164.34. For now, outlook will remain bullish as long as 155.01 support holds, even in case of deep pullback.

In the long term picture, up trend from 75.56 (2011 low) is still in progress and might be ready to resume. Firm break of 161.94 will target 61.8% projection of 102.58 (2020 low) to 161.94 (2024 high) from 139.87 at 176.55 in the medium term. Long term outlook will stay bullish as long as 139.87 support holds, even in case of deep pullback.

GBP/USD's strong rally last week confirms short term bottoming at 1.3139. Initial bias stays on the upside this week for 1.3459 resistance. Firm break there will argue that whole correction from 1.3867 has completed, and target 1.3657 resistance for confirmation. On the downside, below 1.3296 minor support will turn intraday bias neutral again first.

In the bigger picture, price actions from 1.3867 are a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is in favor for a later stage, towards 1.4248 key resistance (2021 high). However, firm break of 1.3008 will at least bring deeper fall to 38.2% retracement of 1.0351 to 1.3867 at 1.2524, with increased risk of bearish reversal.

In the long term picture, as long as 1.4248/4480 resistance zone holds (38.2% retracement of 2.1161 to 1.0351 at 1.4480), the long term outlook will remain bearish. That is, price actions from 1.0351 are seen as a corrective pattern to down trend from 2.1161 (2007 high) only. Nevertheless, decisive break of 1.4248/4480 will be a strong sign of long term bullish reversal.

USD/CHF's pull back from 0.8139 extended lower last week but 0.8012 resistance turned support remains intact. Initial bias remains neutral and another rise is still mildly in favor. Above 0.8139 will extend the rally from 0.7760 to 100% projection 0.7603 to 0.8041 from 0.7600 at 0.8198 next. However, sustained break of 0.8012 will bring deeper fall to 55 D EMA (now at 0.7951) and below.

In the bigger picture, while a medium term bottom was formed at 0.7603, it's still early to call for bullish trend reversal. As long as 38.2% retracement of 0.9200 (2025 high) to 0.7603 at 0.8213 holds, the larger down trend could still continue through 0.7603 at a later stage. However, firm break of 0.7603 will argue that the trend has reversed and turn focus to 0.8332 support turned resistance (2023 low) for confirmation.

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 downtrend. But in either case, outlook will stay bearish as long as 0.8756 support turned resistance holds (2021 low). Retest of 0.7065 should be seen next.

AUD/USD edged lower to 0.6864 last week but recovered since then. Initial bias remains neutral this week for consolidations first. Further fall is expected as long as 0.6977 support turned resistance holds. Below 0.6864 will target 0.6832 support. Firm break there will target 0.6756 fibonacci level. However, sustained break of 0.6977 will bring stronger rebound to 0.7087 resistance instead.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top could be formed at 0.7277 after failing to sustain above 61.8% retracement of 0.8006 (2021 high) to 0.5913 (2024 low) at 0.7206. Deeper fall could be seen to 38.2% retracement of 0.5913 to 0.7277 at 0.6756 as a correction. But strong support should be seen there to bring rebound. Consolidations would continue below 0.7277 for a while.

In the long term picture, rise from 0.5913 is seen as the third leg of the whole pattern from 0.5506 (2020 low). It's still early to judge if this is an impulsive or corrective pattern. But in either case, further rise should be seen back to 0.8006 and possibly above. This will remain the favored case as long as 55 W EMA (now at 0.6828) holds.

USD/CAD stayed in consolidations below 1.4247 last week and outlook is unchanged. Initial bias remains neutral this week first. While deeper pullback cannot be ruled out, downside should be contained above 1.3965 resistance turned support. Above 1.4247 will resume the rally from 1.3480 to 61.8% retracement of 1.4791 to 1.3480 at 1.4290. Firm break there will pave the way back to 1.4791 high.

In the bigger picture, current development suggests that fall from 1.4791 has completed as a three wave correction to 1.3480. It's still early to judge if rise from there a corrective bounce, or resumption of the larger up trend from 1.2005 (2021 low). But in either case, retest of 1.4791 high should be seen next.

In the long term picture, rising 55 M EMA (now at 1.3631) remains intact. Thus, up trend from 0.9056 (2007 low) could still be in progress. However, considering bearish divergence condition M MACD, sustained trading below 55 M EMA will argue that the up trend has completed with five waves up to 1.4791, and turn medium term outlook bearish for correction to 38.2% retracement of 0.9056 to 1.4791 at 1.2600.