SYDNEY, Aug 26 (Reuters) - The Australian and New Zealand dollars struggled to sustain rallies on Friday, but were headed for strong weekly gains, as traders awaited a speech from Federal Reserve Chair Jerome Powell for clues on its rate-hike path.

The Aussie eased 0.2% on Friday to $0.6964, after surging 1% overnight to as high as $0.6991. The currency was heading for a weekly gain of 1.4% and is still some distance away from its recent major support level of around $0.6860.

The New Zealand dollar fell by a larger 0.5% to $0.6202, weighed by comments from the central bank governor Adrian Orr made on Bloomberg Television that the softening in retail sales was "a good signal that monetary policy is biting."

The kiwi was last up 0.5% for the week and has support at the recent one-month low of $0.6157.

"Stronger commodity pricing and an improvement in risk sentiment as measured by the VIX has supported AUD. The next big move in AUD/USD will likely be guided by the USD's reaction to Jackson Hole," said analysts at CBA.

Investors are eyeing Powell's speech at the Jackson Hole symposium at 1400 GMT for any insight into how aggressively the U.S. central bank still plans to raise interest rates.

U.S. Federal Reserve officials on Thursday were noncommittal about the size of the interest rate increase they will approve at their Sept. 20-21 meeting, but continued hammering the point they will drive rates up and keep them there until inflation has been squeezed from the economy.

Yields on Australian government bond futures eased. The 10-year yield fell 7 basis points to 3.608% from the previous close, while the three-year yield dropped to 3.274%, compared with the previous close of 3.324%.

(Reporting by Stella Qiu; Editing by Kim Coghill)