By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, May 19 (Reuters) - The Australian and New Zealand dollars found a tentative footing against the euro on Friday, but were set for a one percent weekly loss with charts pointing to further downside.
The euro steadied at A$1.4959 EURAUD=R , not far from an eight-month peak of A$1.5074 touched on Thursday.
Against the New Zealand dollar EURNZD=R , it edged up to NZ$1.6127, having touched a one-year peak of NZ$1.6151 on Wednesday.
The common currency is benefiting from a safe-haven flow due to political tumult in Washington and a sell-off in emerging markets.
The market often uses the Aussie as a liquid proxy to hedge against weakness in emerging markets.
Charts suggest a push north with major resistance at the September peak of A$1.5093.
"We are very bullish the euro, we see it at A$1.6000 by the end of the year," said Ray Attrill, a strategist at National Australia Bank.
"We expect the ECB (European Central Bank) to change its language in June and signal a winding down of its quantitative easing in September or early next year."
After struggling against the Antipodean currencies since late last year, the euro smartly rebounded in February, to stand 13 cents and 16 cents stronger against the Aussie and the Kiwi, respectively.
Against its U.S. counterpart, the Australian dollar AUD=D4 steadied at $0.7421, having been unable to sustain a peak of $0.7468 when local data on Thursday showed a surprise drop in the jobless rate.
Still, the Aussie was on track for a rise of 0.5 percent this week, its first increase in one month.
Underpinning the Aussie were firmer prices of iron ore, Australia's top export earner.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB was up 0.4 percent so far this week.
The New Zealand dollar NZD=D4 struggled to maintain its recovery to around $0.6950 on Thursday, sinking to $0.6883 on Friday as the U.S. dollar strengthened.
The currency, which had finally made it back to the levels before a central bank decision last week sent it to an 11-month low, was now encountering resistance at its previous one-week high.
"The NZD/USD looks locked in a 0.6850-0.6950 range, with prospects for yield convergence (though market pricing in the U.S. has backed off of late) going head-to-head with policy and political uncertainty towards the USD," said Cameron Bagrie, chief economist at ANZ Bank, in a research note.
The Kiwi was poised to gain 0.5 percent on the week.
New Zealand government bonds 0#NZTSY= gained, sending yields 3 basis points lower at the long end of the curve.
Australian government bond futures edged up, with the three-year bond contract YTTc1 2 ticks higher at 98.230, close to a 6-month summit touched on Thursday.
The 10-year contract YTCc1 gained 2 ticks to 97.4950, having touched a one-month high of 97.5250, while the 20-year contract YXXc1 added 3 ticks to 96.9150. (Editing by Jacqueline Wong)