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NZD/USD is trading quietly within range, with investors cautious ahead of RBNZ’s policy decision this Wednesday. Market consensus is for a 25bps cut, though the NZIER Shadow Board revealed a broad spread of opinions, from a 50bps reduction to no move at all. The diversity highlights some uncertainty surrounding the policy outlook.

According to the Shadow Board, the case for a cut is backed by persistent slack in the labor market and subdued domestic activity. Still, near-term inflation pressures complicate the picture. While one board member argued for a more aggressive 50bps cut to support growth, two stressed the risks of loosening again with price pressures still elevated.

Looking further ahead, views on the OCR in 12 months are diverse, from no additional easing to further cuts required. One member sees strong commodity prices and lower rates supporting activity, with inflation potentially rising toward the top of the RBNZ’s 1–3% target band. That backdrop suggests patience may be prudent. Though, two members maintain the economy will still need further stimulus beyond August.

Technically, NZD/USD remains mildly bearish as its stays confined within the near-term falling channel. Rebound from 0.5855 appears to have topped out at 0.5995. Fall from there is seen as another leg of the decline from 0.6119.

Structurally, while the pullback from 0.6119 looks corrective, risks are skewed toward another dip. A slide to 50% retracement of 0.5484 to 0.6119 at 0.5802 is in favor before NZD/USD finds a firmer base.

Eurozone recorded a EUR 7.0B surplus in goods trade in June, as modest export growth was outpaced by stronger imports. Exports ticked up 0.4% yoy to EUR 237.2B, while imports jumped 6.8% yoy to EUR 230.2B.

Across the EU as a whole, goods surplus narrowed to EUR 8.0B. Exports held steady at EUR 213.7B, but imports rose 6.4% yoy to EUR 205.7B.

Trade with major partners showed contrasting trends. EU exports to the US and China dropped sharply, down -10.3% yoy and -12.7% yoy, while exports to the UK grew 7.4% yoy.

At the same time, imports from the US and China surged by 16.4% yoy and 167% yoy respectively, while UK shipments into the EU declined -3.6% yoy.

Full Eurozone and EU trade balance release here.

GBP/USD is showing strength above 1.3450 and 1.3500. EUR/GBP declined and is now consolidating losses above 0.8600.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is attempting a fresh increase above 1.3500.
• There is a key bullish trend line forming with support near 1.3550 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is trading in a bearish zone below the 0.8650 pivot level.
• There is a connecting bearish trend line forming with resistance near 0.8635 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair remained well-bid above 1.3400. The British Pound started a decent increase above 1.3475 against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.3500. The pair even climbed above 1.3550 and traded as high as 1.3594. Recently, there was a pullback below 1.3575 and the 23.6% Fib retracement level of the upward move from the 1.3399 swing low to the 1.3594 high.

However, the bulls were active near the 1.3520 support. The pair is again rising above 1.3540. There is also a key bullish trend line forming with support near 1.3550.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.3575. The next hurdle for the bulls could be 1.3595. A close above 1.3595 could open the doors for a move toward 1.3640.

Any more gains might send GBP/USD toward 1.3720. On the downside, the bulls might remain active near the same trend line at 1.3550. If there is a downside break below 1.3550, the pair could accelerate lower.

The first major support is at 1.3520, below which the pair could test the 50% Fib retracement at 1.3495. The next key area for the bulls could be 1.3475, below which the pair could test 1.3445. Any more losses could lead it toward 1.3400.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a steady decline from well above 0.8700. The Euro traded below 0.8650 against the British Pound.

The EUR/GBP chart shows that the pair even declined below 0.8620 and the 50-hour simple moving average. A low was formed at 0.8596 and the pair is now consolidating losses. There was a move above 0.8620 and the 23.6% Fib retracement level of the downward move from the 0.8743 swing high to the 0.8596 low.

The pair is now facing resistance near a connecting bearish trend line at 0.8635. The next major barrier for the bulls could be the 50% Fib retracement at 0.8670.

A close above 0.8670 might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8685. Any more gains might send the pair toward the 0.8740 pivot.

Immediate support sits near 0.8620. The first key zone sits at 0.8595. A downside break below 0.8595 might call for more downsides. In the stated case, the pair could drop toward 0.8550.

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In our previous analysis of the US Dollar Index (DXY), we:

→ outlined a descending channel (red) based on a sequence of lower highs and lows;

→ anticipated a move towards the median line of this channel.

As of 18 August, the DXY is trading around the median of the channel and is forming a contracting triangle pattern (blue). The RSI remains close to the neutral 50 level, indicating equilibrium between supply and demand.

This balance may be ruined given upcoming events:

→ Today, discussions at the White House between Donald Trump, Volodymyr Zelenskyy, and European leaders will focus on the conflict in Ukraine. The outcome may provide clarity following the Trump–Putin meeting on 15 August.

→ On Wednesday at 21:00 GMT+3, the FOMC minutes will be released. Markets will look for guidance on the likelihood of a September rate cut after last Thursday’s stronger-than-expected Producer Price Index (PPI) print, which some interpret as a signal of potential inflationary pressures from new trade tariffs.

Market participants should anticipate volatility, with price impulses possible in either direction.

The base scenario for the week is a test of one of the quarter lines (QL/QH) within the channel, consistent with the broader US dollar weakening trend in place since January 2025. A breakout of QL or QH line and sustained move away from the channel median would indicate a shift in sentiment and the potential for a directional move beyond the current structure.

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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.

Markets

US data on Thursday and Friday dampened hopes for the Fed to turn to more neutral policy conditions already at the mid-September policy meeting. After an unexpected acceleration in PPI inflation, July US retail sales also didn’t show any urgency for the Fed to fuel demand already at this stage. Headline sales rose a close-to-expectations 0.5% M/M with June sales being upwardly revised (0.9%). Control group sales (0.5% M/M) also still suggest a decent contribution of consumer spending to Q3 GDP. The NY empire manufacturing survey printed at a solid 11.9 (best in nine months). Michigan consumer confidence disappointed (58.6 from 61.7), mainly due to a less favorable assessment of current conditions. However, the closely watched inflation expectations jumped sharply higher (1-y ahead 4.9% from 4.5%, 5-10-y 3.9% from 3.4%). After Thursday’s post-PPI rebound, US yields in a steepening move added between 1.8 bps (2-y) to 4.6 bps (30-y). Markets again fully returned to a path of gradual Fed policy easing with a first 25 bps step in September and one additional move by the end of the year. A bit surprising/remarkable, German bunds even underperformed US Treasuries with yields rising between 2.7 bps (2-y) and 8.3 bps (30-y). The latter now decisively cleared the 2023 top, trading at the highest level since 2011. Markets pondering the (inflationary/reflationary ) impact of an agreement for the war in Ukraine might have been in play. The ‘better’ US data again didn’t help the dollar. DXY dropped from the 98.20 area to close near 97.85. EUR/USD returned to the 1.17 big figure.

Asian markets take a constructive stance this morning. The meeting between US president Trump and Russian president Putin this weekend at least kept all options open for Trumps’ meeting with Ukrainian President Zelensky and EU leaders today. US yields this morning are shifting to a wait-and-see stance after last week’s rebound. The dollar still struggles to avoid further losses. The eco calendar in the US and Europe is thin today. Later this week, the August PMI’s (Thursday) provide an update on the health of the economy, in EMU but also in the US. However, markets mainly look forward to Fed Powell’s Jackson Hole address scheduled for Friday. Recent US data suggest it’s too early for the Fed Chair to unequivocally open the door for aggressive further policy normalization yet. Even so markets will continue to look for any signs that the Fed is giving more weight to labour market softness rather than to (tariff-driven) inflation. Even as the pace of Fed easing is still subject to a high degree of uncertainty, the dollar probably will remain in the defensive. We also look out whether the negotiations (and hope on progress) regarding the war in Ukraine continues supporting EMU yields and/or the single currency.

News & Views

UK property website Rightmove reported that average asking prices fell by 1.3% M/M in August to £368 740 (+0.3% Y/Y). That’s more or less in line with annual summer lulls, but follows on larger-than-usual price declines in June and July. Affordability increases with one in three properties seen a price reduction since being listed and the number of houses for sale at a decade high (+10% Y/Y). Rightmove indicates that “buyers have the upper hand in this high supply market, so a tempting price is vital to agree a sale”. Lower lending rates thanks to the Bank of England’s gradual policy normalization come in handy though the prospect for much more additional easing is limited.

Indian PM Modi proposed changes to the consumption tax system introduced in 2017. The next-Generation Goods and Services Tax is expected to take effect around the Hindu-festival of Diwali, in October. The current GST-structure with four main slabs (5%, 12%, 18% and 28%) will be replaced with a 5% rate for essential and common-use items, a 18% rate for stands goods and services and 40% for luxury and sin goods. 99% of the items who are currently in the 12% slab will move to the 5% one and around 90% of the items currently taxed at 28% will move to 18%. Petroleum products remain outside the GST regime. The simplified (and lower) tax regime will boost consumers’ disposable income and reduces compliance burden for MSME’s. India’s main equity index, Nifty 50 outperforms this morning, rising by 1.4%..

Daily Pivots: (S1) 1.1662; (P) 1.1689; (R1) 1.1731; More...

Intraday bias in EUR/USD remains neutral and more consolidations could be seen below 1.1729. Further rally is expected as long as 1.1589 support holds. Above 1.1729 will bring retest of 1.1829 high. On the downside, however, firm break of 1.1589 will turn bias to the downside, and extend the corrective pattern from 1.1829 with another fall.

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.

Daily Pivots: (S1) 146.61; (P) 147.29; (R1) 147.83; More...

Sideway trading continues in USD/JPY and intraday bias remains neutral. On the upside, break of 148.51 will indicate that the pullback from 150.90 has completed, and bring retest of this high. This will also keep the whole rise from 139.87 alive. However, firm break of 145.84 support will argue that the rebound from 139.87 has completed, and turn near term outlook bearish.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 1.3532; (P) 1.3553; (R1) 1.3581; More...

Intraday bias in GBP/USD remains neutral and more consolidations would be seen below 1.3594. Deeper pullback might be seen but downside should be contained well above 1.3398 support. On the upside, break of 1.3594 will resume the rise from 1.3140 to retest 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 1.3090) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.7997; (P) 0.8040; (R1) 0.8110; More….

USD/CHF is still bounded in range trading and intraday bias stays neutral. On the downside, break of 0.8020 will revive that case that the corrective pattern from 0.7871 has completed, and target a retest on 0.7871 low. On the upside, firm break of 0.8710 will resume the corrective from 0.7871. Intraday bias will be back on the upside for 38.2% retracement of 0.9200 to 0.7871 at 0.8379.

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) 0.6488; (P) 0.6506; (R1) 0.6525; More...

Intraday bias in AUD/USD remains neutral at this point. Overall, corrective pattern from 0.6624 should still be extending. Above 0.6567 will target 0.6624. On the downside, firm break of 0.6481 will resume the correction through 0.6418 to 38.2% retracement of 0.5913 to 0.6624 at 0.6352.

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).