JGB TECHS: (U6) Resistance Remains Intact

• Gold enters the week near $4,100, well off January's record high near $5,417 but remains historically elevated.  
• Gold finished modestly lower in the US Friday at $4,118 but down -1.1% for the week.  The spike in oil prices Monday sees gold lower at the open of the Asia trading day, down -0.92% at US$4,081
• Gold has been trending lower since its January peak, closing at $3,990 recently on a firmer USD and rate market expectations turning to hikes
• Gold is expected to stay highly volatile amid the release of June CPI and PPI data, the Philadelphia Fed Manufacturing Index, initial jobless claims, and the University of Michigan's inflation expectations survey. Hotter-than-expected CPI/PPI this week could reinforce that hawkish repricing and weigh further on gold.
• The unknown for the week ahead is the current escalation in Iran and its impact on the Strait of Hormuz.
• ST momentum indicators remain mixed with the 14RSI at +46 (i.e. broadly neutral), the MACD line marginally above Signal (moderate bullishness) whilst gold maintains its position below all major moving averages.  The 20, 50, 100 and 200-day EMA are all trending relatively flat suggesting that there is no clear trend for now.   
• Look for gold to trend lower to start the week, likely testing $4,000.  Recent tests below have seen buyers emerge near to $3,050.  

The USD/JPY range Friday night  was 161.28-161.89, Asia is currently trading around 162.00. The pair found demand on the dip back toward 161.00 as the market walked back some of the GPIF reaction. I suspect the market will need some clear confirmation of a change in the GPIF asset allocation before reacting en masse. If proven correct it could be a significant input but this is not the first time the market has heard this story without any follow through. On the day, the first support is toward 161.50 and then the 160.00-160.50 area. The CFTC data shows the market reducing its positions and though still sitting very short Yen it looks as if the MOF threats might be having some impact at least. The underlying story regarding Yen weakness remains the same and core positions are reflecting that, I suspect only a faster rate hiking cycle will probably suffice to break this perpetual loop. The market will be watching closely when two hawks, Takata and Tamura, finish their terms this month. If their replacements are reflationists similar to Asada the board flipping Dovish would not bode well for the Yen.                

• MNI: Fed Promises Price Stability, Policy Rethink To Congress The Federal Reserve under new Chairman Kevin Warsh's leadership Friday emphasized its commitment to delivering price stability and promised a sweeping rethink of how it conducts monetary policy in a report to Congress. It acknowledged that inflation has risen this year and that simple policy rules would call for rates "a little above" the current target range for the federal funds rate of 3.5%-3.75%.
• CFTC Data up to 07/07/2026 shows Asset Managers continued to pare back their newly built short Yen position, -46 183(Last -64 484). The Leveraged community did likewise unwinding a decent chunk of their large core shorts, –104 231(Last -137 828).
• Options : Close significant option expiries for NY cut, based on DTCC data: 160.00($1.26b), 160.50($3.52b), 163.00($1.77b). Upcoming Close Strikes : 158.00($1.28b July 16), 160.50($1.81b July 15), 164.25($1.92b July 16) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 73 Points
• Data/Event : Bloomberg July Japan Economic Survey 

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range Friday night of 0.5754 - 0.5778, Asia is currently trading around 0.5750, -0.23%. The NZD looks to have topped out toward 0.5800 at the first time of asking. The CFTC data shows the market had been caught quite short ahead of the RBNZ meeting last week. The question now is how does risk start the week with the Straits again closed. Should risk pull back, is that enough to see this retracement top out. On the day, pivotal resistance is in the 0.5770-0.5820 area which should prove to be tough and I would continue to be skewed toward fading that move which has held on its initial attempt.      

• MNI - At 2.5% the OCR is still stimulatory and so further rate hikes this year are likely but highly data dependent. Therefore, data releases and MPC appearances will be watched closely. While there is some June data to round out Q2 this week, the focus is likely to be on RBNZ Chief Economist Conway’s speech on the oil shock and inflation on Tuesday.
• (Bloomberg) - “New Zealand plans to sign a contract for its first LNG import facility before the November election. The procurement process is underway, with a preferred bidder expected to be selected before the vote.”
• CFTC Data up to 07/07/2026 shows Asset Managers maintaining their core short positions in the NZD, -57 568(Last -57 210). The Leveraged community added slightly to their own core shorts, -27 675(Last -25 757). 
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes : 0.5770(NZD338m July 15) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 42 Points
• Data/Event: Performance Services Index

Fig 1: NZD CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P