In July, Australian household consumption saw a significant rise with year-on-year growth reaching 5.1%, the highest in 20 months. This was driven primarily by strong performance in service sectors such as healthcare, hospitality, aviation, and dining. This data has reinforced market expectations that the RBA will keep interest rates unchanged at its September meeting and may influence the pace of future rate cuts. RBA Governor Michele Bullock noted that while the recovery in consumer spending is positive, continued strength could limit the scope for rate reductions. Q2 GDP figures, released at the same time, showed the economy grew by 0.6%, with discretionary spending rising by 1.4% (the fastest pace in three years). Unit labor costs increased by an annualized 4.4%, indicating ongoing inflationary pressures. As a result, market expectations for RBA rate cuts have moderated somewhat. The probability of a rate cut in November is now around 90%, significantly lower than previously priced-in levels. While these figures provided a slight boost to the Australian dollar, the overall impact was limited.

Although ADP employment data has limited correlation with the official nonfarm payrolls report, multiple indicators suggest the labor market is slowing: job vacancies in July fell more than expected, and the number of unemployed individuals surpassed job openings for the first time since April 2021. The market is closely watching the upcoming August nonfarm payrolls report. If, as expected, only 75,000 jobs are added and the unemployment rate rises to 4.3%, it would likely further cement expectations for rate cuts. However, even as labor market weakness emerges, inflationary pressures remain persistent, constraining the Federal Reserve's policy flexibility. The ISM services sector prices paid index remained elevated at 69.2 in August, indicating ongoing inflationary pressures in the service sector. While Fed Chair Jerome Powell acknowledged rising employment risks and hinted at possible rate cuts, he also emphasized that inflation remains the central focus of monetary policy. The federal funds rate currently remains within the 4.25% to 4.50% range. Overall, although signs of softness in the U.S. labor market have boosted expectations for Fed rate cuts, persistently high service-sector inflation is lending short-term support to the U.S. dollar. The August ISM non-manufacturing PMI rose to 52.0, reflecting strong service-sector demand and recovery. However, the employment index continued to contract, and ADP employment growth came in well below expectations, signaling a clear cooling in the labor market. As a result, market expectations for rate cuts have intensified, with a 98% probability now assigned to a cut at the September meeting. Nonetheless, the persistently high services price paid index at 69.2 underscores the stickiness of inflation, limiting the Fed's ability to pivot quickly to an easing stance. This tension between easing expectations and inflation realities is helping to underpin the U.S. dollar's relative strength. Ahead of the Friday nonfarm payrolls release, inflation concerns will likely remain the main factor supporting the U.S. dollar's resilience in the near term.

Based on the daily timeframe, the Bollinger Bands narrowed and converged, while the moving averages flattened. Now, the price is oscillating between the Bollinger Upper and Lower Bands. Besides, the MACD line and the signal line have returned above the zero axis, and the RSI stands at 53 (in neutral territory), suggesting a cautious, wait-and-see stance in the short term. A cross above 0.66 may drive the pair to 0.677, while a breach below 0.643 could drag the pair to 0.59. According to the weekly chart, after getting suppressed by the Bollinger Upper Band, the price broke below the EMA12 but found support at the Bollinger Middle Band, followed by a rebound. If it can hold above both the Bollinger Middle Band and EMA12, further upside toward the EMA200 may be possible. Failure to hold these levels could lead to a decline toward the Bollinger Lower Band, currently near 0.62. Therefore, selling at highs is recommended.

Trading direction: Sell

Entry price: 0.653

Target price: 0.63

Stop loss: 0.67

Support: 0.638/0.635/0.63

Resistance: 0.657/0.66/0.667

Australia’s external sector delivered mixed signals earlier on Thursday. July’s trade figures revealed a notable improvement, with the surplus widening to AUD 7.31 billion compared to AUD 5.37 billion in June, comfortably beating forecasts of AUD 4.92 billion. The improvement came as exports climbed 3.3%, supported by stronger shipments of iron ore, liquefied natural gas, gold, and beef. At the same time, imports slipped 1.3%, weighed down by weaker demand for consumer goods and gold.

In international developments, Bloomberg reported late Thursday that U.S. President Donald Trump signed an executive order to implement his trade agreement with Japan. The deal establishes a maximum tariff of 15% on most imports from Japan, including automobiles and auto parts. Additionally, Japan committed to fast-tracking a 75% increase in U.S. rice purchases, a move seen as strengthening agricultural trade ties between Washington and Tokyo.

Domestically, U.S. economic data continued to offer a mixed picture. The labor market showed further signs of cooling as weekly initial jobless claims ticked higher. At the same time, the trade deficit widened in July while the services sector posted its strongest expansion in six months.

The Commerce Department reported that the U.S. trade balance deficit surged to -$78.3 billion in July, its widest in four months, compared with -$59.1 billion in June and above market forecasts of -$75.7 billion. The data suggested that businesses may have accelerated imports to secure supplies before new tariffs came into effect. The report also revealed that the U.S. trade deficit with China expanded for the first time in several months, while the gap with Mexico widened modestly.

Meanwhile, the ISM Services PMI rose to 52 in August from 50.1 previously, exceeding expectations of 51. The data signaled a firm rebound in service-sector activity. However, the Prices Paid subindex surged to 69.2—the second-highest level since late 2022—highlighting persistent inflationary pressures stemming from tariffs and elevated input costs.

Labor market data also disappointed. The ADP Employment Change for August showed a gain of 54K jobs, below the forecast of 65K, though July’s figure was revised upward from 104K to 106K. ADP’s Chief Economist, Dr. Nela Richardson, commented that while the year began with solid job creation, momentum has been rattled by rising uncertainty. She pointed to labor shortages, cautious consumer behavior, and disruptions related to artificial intelligence as factors slowing hiring.

On the monetary policy front, New York Fed President John Williams reiterated that he expects gradual rate cuts over time, provided the economy evolves in line with forecasts. Meanwhile, Fed Board nominee Stephen Miran stressed the importance of maintaining the central bank’s independence, though he refrained from commenting on whether he would advise President Trump against removing Fed officials.

AUD/USD is currently rebounding near its 100-period and 200-period moving averages on the 4-hour chart, located at 0.6499 and 0.6506 respectively. The convergence of these averages suggests that price is hovering around its local mean, effectively acting as dynamic support. If this level holds firmly, the pair could stage another bullish leg toward 0.6590, where the next resistance level lies. Meanwhile, the RSI sits at 48, still within neutral territory, leaving room for a potential upward move.

On the downside, the next support level is seen near 0.6489. A break below this area could accelerate bearish momentum, with the following support situated at 0.6414. Any unexpected surprises in upcoming data releases could trigger a test of this lower region.

Trading direction: Buy

Entry price: 0.6523

Target price: 0.6590

Stop loss: 0.6460

Validity: Sep 12, 2025 15:00:00

U.S. President Donald Trump signed an executive order implementing his trade agreement with Japan, Bloomberg reported late Thursday. The deal sets a maximum tariff of 15% on most imports from Japan, including automobiles and auto parts. In addition, the White House announced that Japan has committed to fast-tracking a 75% increase in purchases of U.S. rice, a move designed to strengthen agricultural trade ties between the two nations.

On the domestic front, recent data continued to paint a mixed picture of the U.S. economy. The labor market showed further signs of cooling as initial jobless claims rose again last week. At the same time, the trade deficit widened in July, while the services sector posted its strongest expansion in six months.

The Commerce Department revealed that the U.S. trade balance deficit surged to -$78.3 billion in July, a four-month high, up from -$59.1 billion in June and wider than the forecast of -$75.7 billion. The data suggested that companies rushed to secure supplies ahead of tariff implementation. The report also showed the U.S. trade deficit with China expanded for the first time in several months, while the gap with Mexico widened slightly.

Meanwhile, the ISM Services PMI climbed to 52 in August, up from 50.1 and beating expectations of 51. The increase signaled a solid improvement in service-sector activity. However, the Prices Paid subindex rose sharply to 69.2—the second-highest reading since late 2022—underscoring the inflationary pressures stemming from tariffs and higher input costs.

Employment data also disappointed. The ADP Employment Change for August showed an increase of 54K jobs, below the forecast of 65K, though July’s reading was revised higher from 104K to 106K. ADP Chief Economist Dr. Nela Richardson commented that while the year began with robust job growth, momentum has been shaken by growing uncertainty. She cited a combination of factors behind the slowdown in hiring, including labor shortages, cautious consumers, and disruptions linked to artificial intelligence.

On the monetary policy front, New York Fed President John Williams stated that he expects gradual interest rate cuts over time, provided the economy evolves in line with forecasts. Separately, Fed Board nominee Stephen Miran emphasized the importance of preserving the central bank’s independence, though he declined to answer whether he would advise President Trump against dismissing Fed members.

In Europe, retail sales in the eurozone fell 0.5% month-on-month in July, a steeper drop than the expected 0.2% decline and reversing the 0.6% gain in June. On an annual basis, sales rose 2.2%, falling short of forecasts at 2.4% and well below June’s 3.5% growth rate. The data underscored weaker domestic demand, fueling concerns about the eurozone’s growth outlook, even as inflation remains slightly above the European Central Bank’s 2% target.

EURUSD continues to display a bearish tone on the 4-hour chart, yet recent price action suggests that the pair is testing a descending trendline and may be preparing for a breakout to the upside. A decisive move higher could open the door for further gains, particularly if the pair sustains momentum above key technical levels. At present, the price is fluctuating between the 100- and 200-period moving averages, positioned at 1.1661 and 1.1642, respectively. A firm hold above these levels could pave the way for a rally toward 1.1733, where the next major resistance lies.

The RSI stands at 49, still within neutral territory, indicating room for directional movement. A dip toward support at 1.1590 remains possible, but as long as this level holds, buyers may attempt to initiate a fresh bullish leg. Conversely, a decisive breakdown below this support could invalidate the bullish setup and trigger a more extended downward move.

Trading direction: Buy

Entry price: 1.1595

Target price: 1.1730

Stop loss: 1.1540

Validity: Sep 12, 2025 15:00:00

WTI front-month futures remain capped by stiff resistance near USD 66.05/bbl, a level that has repeatedly rejected upside probes and entrenched the bearish bias in place since the August peak.

The contract's inability to sustain prints above this barrier underscores that bears retain firm technical control and are positioning for another leg lower. The recent slide through the short-term ascending trendline—previously acting as dynamic support—signals a momentum regime shift and unlocks a cluster of Fibonacci extension targets that now define the roadmap for the ongoing correction.

Based on the current technical setup, the 38.2% Fibonacci extension level is projected at USD 62.68/bbl, followed by the 50% extension at USD 61.61/bbl, which aligns closely with a prior congestion support zone. A more pronounced sell-off could extend toward the 61.8% extension at USD 60.54/bbl. While the 76.4% level—at USD 59.21/bbl—would be activated under a deeper bearish scenario.

Reports indicate that OPEC+ output exceeded guidance by approximately 400,000 b/d in August and that the group intends to raise production further over the coming months. In line with consensus, we expect the alliance to roll over October quotas. However, given the scale of the anticipated global surplus in 2026, the cartel is unlikely to inject additional barrels into an already oversupplied market. The asymmetric risk, therefore, lies in OPEC+ opting to reinstate output curbs rather than loosen them.

Crude is currently changing hands around USD 62.70, and bearish momentum appears to be accelerating after Friday's slide through the technically significant USD 62.78/bbl support. The moving-average complex is deteriorating rapidly: the short-dated rolling mean has rolled over and is on the verge of printing a bearish crossover, a setup that historically coincides with trend continuation to the downside.

The stochastic oscillator has already stalled at elevated levels and is now turning lower from its upper bound, signalling that the latest relief rally has run out of steam and fresh selling interest is emerging. Momentum gauges still sit above the oversold threshold, leaving room for an additional leg lower before reaching climactic territory.

The relative-strength index is mirroring the loss of upside traction, tracking a downward trend that typically validates sustained bearish price action while sellers retain the whip hand.

Trading Direction: Sell

Entry Price: 64.50

Target Price: 58.37

Stop Loss: 65.80

Valid Until: September 19, 2025, 23:55:00

Support: 62.52/62.16/61.36

Resistance: 63.44/64.95/65.72

WTI Equity indices staged a late-session rebound on Wednesday, erasing a mid-day sell-off to finish predominantly in the green. After back-to-back declines, the tech-heavy Nasdaq Composite and the S&P 500 clawed back lost ground, whereas the price-weighted Dow Jones Industrial Average extended its losing streak.

The Nasdaq advanced 218.10 bps, or 1.0%, to 21,497. The S&P 500 added 32 bps, or 0.5%, settling at 6,448. Conversely, the Dow slipped 24.58bps, or 0.1%, to 45,271.

A Labor Department release showing US job openings falling to a 10-month low in July underpinned the late rally. While the print reinforced evidence of a loosening labour market, it simultaneously bolstered conviction that the Fed will deliver a rate cut later this month.

U.S. equities still have room to extend their four-month winning streak, as the Fed's easing cycle is set to coincide with resilient corporate earnings growth. The economy is entering an “early-cycle” phase in which nominal profits re-accelerate while funding costs begin to decline.

Moreover, rate-sensitive segments—small-caps in particular—have lagged year-to-date, leaving them with catch-up potential.

We disagree that the entire rate-cut trajectory is already baked into valuations. Seasonal headwinds in September and any upside inflation surprise remain near-term risks to the rally. However, a tactical pullback would likely lay the groundwork for a strong year-end finish.

U.S. equities are projected to advance another 20% by the end of 2026, powered chiefly by the artificial-intelligence boom. A technological revolution is propelling share prices, valuation multiples and the broader society to unprecedented levels. The target implies a further 20% rally from Friday's close and would extend the about 10% gain already recorded year-to-date.

AI-driven efficiencies are keeping corporate earnings comfortably ahead of consensus. Q2 results posted double-digit growth and broad-based positive surprises, even as tariff headwinds and policy uncertainty linger.

The Dow Jones Industrial Average has found key technical support near 44,930. A decisive break below this level would open additional downside extension. Conversely, a successful defense would set the stage for a near-term rebound.

In the short term, the index has slipped below its MA20, signaling intensifying downside pressure. Failure to promptly reclaim this moving average would further entrench bearish dominance. The MA50 is still ascending, yet the positive price-to-moving-average differential is narrowing. A violation of this average would risk triggering a deeper corrective move.

Momentum: The Stochastic oscillator has entered oversold territory, suggesting scope for a technical bounce. However, the Relative Strength Index (RSI) remains in a downward trajectory with no clear stabilization, implying any rebound may be limited. The MACD histogram continues to contract; a bearish crossover would provide additional confirmation of the downtrend.

Overall, the Dow's price action remains skewed to the downside, though the primary uptrend is still intact. Market attention is now squarely on Friday's non-farm payrolls report.

Trading Direction: Buy

Entry Price: 45000

Target Price: 46343

Stop Loss: 44100

Valid Until: September 19, 2025, 23:55:00

Support: 44939/44850/44582

Resistance: 45333/45547/45771

The New Zealand dollar came under renewed selling pressure on Thursday, with NZD/USD edging down toward the 0.5870 mark during early European trading. The pair’s decline reflects a mix of global and domestic forces: a firming U.S. dollar, caution in markets ahead of key U.S. labor and services data, and a persistently dovish stance from the Reserve Bank of New Zealand (RBNZ).

Investors are treading carefully ahead of several U.S. economic releases later in the day, including the weekly Initial Jobless Claims, ADP private employment figures, and the ISM Services PMI. Together, these reports are expected to provide critical clues on the strength of the U.S. economy and shape expectations for the Federal Reserve’s policy decision later this month.

The local backdrop for the kiwi remains heavy. Since August 2024, the RBNZ has embarked on an aggressive rate-cutting cycle in an effort to support a fragile recovery, following one of the most aggressive tightening campaigns in decades to curb inflation. Policymakers in Wellington have signaled that additional cuts remain on the table as growth momentum stalls and inflation retreats toward target.

Markets now anticipate at least two more rate reductions by early 2025, which would bring the Official Cash Rate down to 2.50% — a level last seen in mid-2022. Such a move would underscore the central bank’s pivot toward prioritizing growth over inflation, but at the expense of the kiwi’s yield advantage. In global FX markets, where carry trades often dominate flows, a lower OCR reduces the attractiveness of holding NZD against higher-yielding currencies, particularly the U.S. dollar.

“The RBNZ’s dovish pivot has left the kiwi vulnerable to further declines, especially as global investors rotate into the dollar’s relative safety,” one Wellington-based strategist noted.

Yet, the kiwi’s downside may be partially cushioned by developments across the Pacific. Fresh data out Wednesday showed U.S. job openings fell more than expected, suggesting that cracks are deepening in America’s once-resilient labor market. This slowdown has strengthened the case for the Fed to begin easing rates.

According to the CME FedWatch Tool, traders are now pricing in a near-certainty — about 97% — that the Fed will cut interest rates at its September meeting. That probability has risen sharply from 91% just a week earlier. Market participants are also betting on a total of around 139 basis points of easing by the end of 2025.

A dovish Fed, in contrast to the RBNZ’s already aggressive cuts, complicates the outlook for NZD/USD. While rate differentials still favor the greenback in the near term, growing U.S. easing bets could temper its strength and limit the downside for the kiwi.

From a technical perspective, NZD/USD remains vulnerable. The pair has been trading in a downward-sloping channel since the July 1 swing high, and its recent rally appears to have run out of steam.

On the daily chart, the Relative Strength Index (RSI) has touched the lower highs trendline, suggesting that the latest bullish leg may have already topped. Price action is also stalling just shy of the 0.618 Fibonacci retracement level, a zone where previous lower highs have repeatedly emerged.

If history is a guide, the pair could now be on the cusp of its next bearish leg. Based on the declining rate of prior pullbacks, analysts project a potential drop of around 3.1%, which would place the next fair target near 0.5700. A decisive break below this level could open the door for further weakness toward mid-June lows.

SELL NZDUSD

ENTRY PRICE: 0.5840

STOP LOSS: 0.5900

TAKE PROFIT: 0.5700