This week's five highlights

The June Minutes show a Committee that had skewed slightly more hawkish, in pockets, but had mainly moved toward greater uncertainty and dispersion. The spine of the policy debate now revolves around a fork in the road: two plausible inflation trajectories, with policy calibration in either direction. Inflation risks had broadened, labor market downside had eased, but the outlook was explicitly cast around competing scenarios.

The vote to hold the funds range steady was unanimous, while confirming that most backed dropping the easing bias language, with the majority also seeing advantages in shortening the statement – that might as much reflect the lack of clear direction, as the known broader philosophical stance.

Some hawkish skew was visible in the policy discussion. Participants judged that upside risks to price stability remained elevated, while downside risks to employment had 'moderated a bit.' A few participants saw a case for raising rates, though they supported holding at this meeting. That is perhaps the strongest line that implied a minority tightening bias, if lightly stated.  

On the chart, the anticipated test of support at the 100.64 monthly low of 31 March is giving way to consolidation, as oversold intraday studies flatten, with prices currently balanced around 100.80. Daily studies continue to track lower and overbought weekly stochastics are unwinding, pointing to room for further losses in the coming sessions. A close beneath here will add weight to sentiment and extend late-June losses towards the 100.00 - 100.20 range. Meanwhile, resistance remains at 101.00. A close back above here would help to stabilise price action and prompt consolidation beneath resistance at 101.50.

The RBNZ hike rates by 25bps to 2.5% in the July meeting unanimously. It is a decisive shift from May's split hold and led the RBNZ into its tightening cycle. Forward guidance sound hawkish but clearly indicates uncertainty ahead. 

Some key takeaways:

Inflation Forecast to Have Peaked: The RBNZ forecast headline inflation to have peaked at 3.9% in June 2026. They expect headline moderation to 3.3% in September 2026 before returning to target range in the second half of 2027. Governor Breman may have spoken too soon as we heard U.S.-Iran exchanging fire and broken the fragile truce already.

Hawkish But Uncertainty Outlook: They clearly indicated their trajectory to move rates to neutral, ranging from 2.5-3.5%. Without any Middle East certainty, there is no meaningful OCR forecast. But with energy prices currently lower, the next spike in CPI (if any from full blown Middle East war again) will likely come in months rather than weeks. It could see the next hike only close to Q4 2026.

On the chart, consolidation at the .5700 level has given way to extension above the .5727 high of last week to approach strong resistance at .5770/80 previous lows. Reaction here can be expected but the positive daily studies suggest scope for break later to extend the June gains and further retrace losses from the May high. Higher will see room for extension to the .5800/15 congestion and May low. Meanwhile, support at the .5700 level and extending to the .5670 pullback low should underpin and sustain gains from the .5625 low.

USD/JPY has seen corrective move on softer USD. The move is further accelerated by Japan FM's suggestion that GBIF will be encouraged to invest more in domestic assets. It helps calming the market regarding Japanese government budget and vacuum from BoJ's purchase tapering. JGB yields are lower across the curve.

Technically, test higher has seen gains checked at the 162.70 as prices unwind overbought intraday studies. However, bullish prices action keeps pressure on the upside and focus firmly on the 162.84 high. Break here, if seen, will extend the underlying bull trend and see room for gains to the 163.00/164.00 congestion and high of December 1986. However, overbought daily and weekly studies caution corrective pullback with support starting at the 162.00/161.00 congestion area. Would take break here and the 160.48 low of 3 July to fade the upside pressure and see deeper pullback to retrace strong gains from the May low.