AUDUSD TECHS: Trend Needle Points South

• RES 4: 0.7310 1.00 proj of the Mar 30 - May 6 - Jun 30 price swing
• RES 3: 0.7278 High May 6 and key resistance
• RES 2: 0.7223 High May 15
• RES 1: 0.7208 High Aug 28
• PRICE: 0.7141 @ 08:08 BST Sep 02
• SUP 1: 0.7116 20-day EMA
• SUP 2: 0.7070/0.6922 50-day EMA / Low Jul 29 
• SUP 3: 0.6907 Low Jul 8
• SUP 4: 0.6865 Low Jun 30 and the bear trigger 

A bull cycle in AUDUSD remains intact - for now - and a fresh cycle high last week reinforces current trend conditions. The pair has breached 0.7181, the 76.4% retracement of the May 6 - Jun 30 bear leg. The move higher strengthens the bull theme and maintains the rising price sequence of higher highs and higher lows. Sights are on 0.7223 next, the May 15 high. Key support to watch is the 50-day EMA at 0.7070.

The Norwegian current account surplus was NOK297bln in Q2, up from NOK248bln in Q1. 

• The increase was driven primarily by a rise in the crude oil and natural gas surplus to NOK347bln  (unsurprising given the energy price/geopolitical environment). However, a decline in the services deficit to NOK10.3bln and a rise in the income and transfers surplus to NOK46.9bln also contributed. The goods ex-oil/gas deficit widened to NOK104bln.
• On a 4Q rolling basis to GDP, the current account surplus rose to 15%, up from 14% in Q1 for the widest in a year. The oil/gas surplus rose to 21% GDP (vs 20% prior), while the services, goods ex-oil/gas and income balances were steady.
• The financial account balance rose back to 17% GDP (again on a 4Q rolling basis) in Q2, after 14% in Q1 and 18% in Q4 2025.
• Within this, the direct investment outflow (i.e. from NOK) was 2% GDP (vs 1% in Q1), while the portfolio investment outflow rose to 20% GDP (vs 17% in Q1). Flows related to the government’s pension fund is a key component of the portfolio investment category. Crudely splitting out GPFG and non-GPFG flows (using monthly GPFG data from Norges Bank) indicates that the GPFG outflow was 55% GDP in Q2 (vs 27% in Q1).
• This leaves Norway’s international investment position at a fresh high of 405% GDP – the majority of which represents GPFG assets.  This is up from 352% in Q1, aided by strong returns on foreign portfolio assets. Statistics Norway also highlights that a weaker NOK in Q2 pushed the IIP higher. 

Yields 2.5-3.5bp higher, curve flattens.

• The ’08 yield high in 10s (5.274%) remains intact at the open, continuing to present the major bearish target on the curve.
• 6.00% is a little over 10bp away from prevailing levels in 30s.
• Further forward on the curve, year-to-date highs in 2s (4.713%) remain untested.
• Week-to-date hawkish repricing has driven meaningful curve flattening.
• 2s10s nears 60bp, a level not traded below since late July.  A break there would expose the July low (58.24bp).
• 5s30s is through 115bp, but the July low (110.41bp) remains untested