RBNZ: MNI RBNZ Review – August 2024: RBNZ Plans “Cautious” Easing

• RES 4: 117.160 High Jun 14 and the bull trigger
• RES 2: 116.920 High Jun 24
• RES 3: 116.775 76.4% retracement of the Jun 14 - Jul 5 bear leg
• RES 1: 116.610 High Jul 11
• PRICE: 116.550 @ 05:51 BST Jul 16
• SUP 1: 115.980 Low Jul 10 / 11
• SUP 2: 115.530 Low Jul and the key short-term support
• SUP 3: 115.180 Low Jun 10
• SUP 4: 115.060 Low May 31 and the bear trigger

The medium-term trend set-up in Bobl futures is unchanged and remains bearish. However, a corrective cycle is in play and last week’s strong gains strengthen the near-term bullish theme. A resumption of gains would open 116.775, a Fibonacci retracement. Clearance of this level would expose 117.160, the Jun 14 high and bull trigger. On the downside, a reversal would refocus attention on 115.530, the Jul 5 low and a key support.

Asian stocks are mixed today, despite gains on Wall Street with the possibility of a second Donald Trump term increasing, PredictIt now has him at a 68% chance of winning the election. Trump trades have been the focus today, with regions perceived to benefit from a Trump presidency out-performing, while the bonds market continues to see curve steepener trades. Regionally it has been a slow session, with very little in the way of economic data or market headlines the market has been awaiting headlines out of the Third Plenum policy meetings happening in China right now where they are expected to set strategies and policies for the coming decade.

• Japanese equities are benefiting from growing expectations of a US rate cut, with the futures market currently fully pricing in a cut in September, while Japan is also expected to gain from a Trump presidency. Later we have Tertiary Industry Index which is expected to to 0.1% m/m for May, down from 1.9% prior. The Topix is 0.50% higher, while the Nikkei is up 0.25%
• South Korean large-cap stocks have erased earlier losses with the Kospi now up 0.30%, while small-cap stocks underperform with the Kosdaq down 1.50%. President Yoon Suk Yeol holds cabinet meeting after returning home from a five-day trip to US, which included the NATO summit. In June, South Korea's export price index rose 12.2% year-on-year and 0.9% month-on-month, while the import price index increased 9.7% year-on-year and 0.7% month-on-month, according to the BOK.
• Taiwan equities have done very little today, trading steady. Overnight, the Philadelphia SE Semiconductor Index closed 0.04% higher, and we have yet to see any headlines out of the Third Plenum meeting to cause a directional trading move. The Taiex is currently trading 0.13% higher.
• Australian equities are a touch lower today after reaching a record high on Monday. Miners declined due to falling commodity prices amid weak Chinese demand and after Rio Tinto's quarterly production report. Conversely, financial stocks rose, mirroring gains in US financial stocks following positive results from Goldman Sachs and BlackRock. The ASX200 is down 0.20%.
• Elsewhere, New Zealand equities are 0.35% higher, Philippines equities are 0.10% higher, Indian equities are 0.25% higher, while Malaysian equities are 0.25% lower, Singapore equities are down 0.25% and Indonesia equities are down 0.45%

• RES 4: 1.0981 High Mar 3
• RES 3: 1.0943 High Jan 21
• RES 2: 1.0916 High Jun 04 and the bull trigger
• RES 1: 1.0922 High Jul 15
• PRICE: 1.0893 @ 05:58 BST Jul 16
• SUP 1: 1.0807/1.0736 20-day EMA / Low Jul 3
• SUP 2: 1.0666 Low Jun 26 and the bear trigger
• SUP 3: 1.0650 Low May 1
• SUP 4: 1.0601 Low Apr 16 and a key support

EURUSD maintains a bullish theme. Last week’s gains confirmed a resumption of the current short-term bull cycle that started Jun 26. Resistance at 1.0852, the Jun 12 high, has been cleared. The break signalled scope for an extension towards key resistance at 1.0916, Jun 4 high and the next key hurdle for bulls. It has been pierced, a clear breach would open 1.0943, the Jan 21 high. Support to watch is 1.0798, the 20-day EMA.