AUSSIE 10-YEAR TECHS: (U6) Through M/T Support

The NZD/USD had a range overnight of 0.5879 - 0.5900, Asia is currently trading around 0.5885. The pair stalled again toward the 0.5900 area but for the moment the pullback has been negligible. Will risk and the USD start to play catch up to the move in Oil ? For the moment the lack of a reaction does stand out. On the day, support lies toward the 0.5830-0.5860 area, and a sustained move back above the 0.5925 would be problematic for a market that is still positioned short. We still remain within the recent short-term 0.5800-0.5900 range but pressure is building, let's see if it can continue to hold.    

• “Donald Trump countered Tehran’s calls for war reparations with sweeping demands of his own, including compensation for casualties from Iranian-backed conflicts and decades of protest crackdowns.” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes : 0.5600(NZD450m Aug 12), 0.5700(NZD365m Aug 12), 0.5825(NZD403m Aug 12) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 35 Points

Fig 1: NZD/USD Spot Daily Chart

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

The AUD/USD had a range overnight of 0.7053-0.7074, Asia is currently trading around 0.7054. The pair stalled again toward the NFP highs overnight and has drifted back toward 0.7050. The debacle in the Middle-East is just getting more farcical but the key point is Oil is still not flowing and it doesn't look likely to start anytime soon. A short Oil market is starting to feel the pinch and with the move back above $80(+5.05%) for WTI I am surprised by the lack of reaction in other Asset classes. Perhaps it's just exhaustion and the market is tired of being so chopped up but the response from both Stocks and FX has been muted to say the least. On the day, the AUD is challenging its resistance in the 0.7050-0.7080 area. The first support is now back toward 0.6990-0.7020 and I suspect dips in the AUD could initially be supported in the short-term as headwinds for the USD continue to mount. I have been skewed toward fading this rally but will need this move to top out up here soon and challenge the 0.6950 area if that scenario is to play out. RBA today but it is unlikely we will get too much of a surprise.

• MNI RBA Preview-August 2026: Hold, Price Pressures Persist. Download Full Preview Here
• The RBA announces its decision today and is likely to keep rates at 4.35% with a unanimous vote for the second consecutive meeting following lower-than-expected Q2 underlying inflation, tightening of financial conditions and easing in demand growth as expected. 
• The decision is still likely to be a hawkish hold given underlying inflation remains well above the top of the 2-3% target band, persistent capacity pressures, uncertainty continues to be elevated and retail fuel prices are up again.
• Given that Bullock said the economy has developed “broadly as expected”, forecast revisions included this month are likely to be moderate and concentrated in the near-term.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.7035(AUD466m), 0.7075(AUD340m). Upcoming Close Strikes : 0.6800(AUD519m Aug 12), 0.7000(AUD874m Aug 13), 0.7100(AUD620m Aug 14) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 37 Points
• Data/Event: NAB Business Confidence, RBA

Fig 1: AUD/USD spot Daily Chart

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

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