• GBP$ firm in NY afternoon, +0.36% at 1.3272; Tuesday range 1.3286-1.3202

• Bid near 1.32 since late-September intact, USD under pressure as global yields slip

• Risk rallied broadly as French fiscal concerns ebb 10-yr OAT -13bp, UK 10-yr Gilt -2bp

• UK inflation, high yields a concern ahead of UK CPI Oct 21, Autumn Budget Oct 28

• LSEG's IRPR sees BoE +22bp in Nov, total of +36bp by Dec MPC; Fed +26bp by Dec

• GBP$ res 1.3286 Tuesday high, 1.3311 daily high Sept 30, 1.3349 falling 21-DMA

• Supt 1.3238 the 10-DMA, 1.3202 Tuesday low, 1.3181 daily low Oct 1

GBP$/Glbl bonds Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

• NY opened near 1.1240 after 1.1203 traded overnight, rally extended in NY

• USD, US yield drops & tighter US-DE spreads

buoyed

• Oil, USD/CNH drops & rallies in gold, silver and stocks also contributed to the lift

• 1.1276 traded; USD firmed a bit & EUR/USD neared 1.1260 late, up +0.32%

• Rising daily RSI, rally after Monday's bull hammer are concerns for EUR/USD bears

• The long lower wick on October's monthly candle is also a concern for bears
eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research discusses USD/JPY outlook into year-end.

"We cannot possibly know how the GPIF will change its asset allocations. The pension fund will be reporting its Q2 performance in early November and could announce any reallocations then. Looking across our potential reallocations, USD/JPY’s short-term fair value ranges from about 140-150 with a median of 148. If we were forced to choose the most likely scenarios, which we need to do to forecast, we would focus on allocations towards domestic bonds between 31-35% in combination with no change to a modest rise in the allocation to domestic equities of 31%," CACIB notes.

"We doubt the GPIF would want to allocate much more than 60% of its AUM to domestic assets. So, we expect USD/JPY to track lower to 150 by end-2026 given this would lead to a fall in USD/JPY’s short-term fair value to between 148-150," CACIB adds.

• NY opened near 0.6965, the pair was down slightly in early NY action

• A rally ensued however as USD selling & US yields

sank

• Gold, silver, copper & stocks rallies also helped buoy AUD/USD

• the pair rallied above the 10-DMA, hit 0.6990 then dipped slightly

• AUD/USD sat just above 0.6981 & traded up +0.13% in NY's afternoon

• Rising RSIs, piercing of 10-DMA, bull pennant on monthly chart are bull signals
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

ANZ Research adopts a neutral bias on GBP/USD in the near-term.

"We expect the GBP/USD to consolidate in the current range. Better US data would support the USD, and one-month risk reversals show more demand for downside GBP/USD protection," ANZ notes.

"The technical picture agrees. GBP/USD broke below 1.3266, the 76.4% retracement of the June-August rally. The next support is 1.3140 (24 June low). Firm resistance is at the 50-dma near 1.3456," ANZ adds.

• a touch higher in early NorAm, +0.55% at 86.3k; Tuesday range 86.4k-85.1k

• Global yields moving lower as French fiscal woes ebb, aids BTC recovery

• Risk broadly better in NorAm, global equities, gold pushing higher

• Bitcoin keeps getting rejected at $87,000 as stocks hover near records

• BTC res 86.4k Tues high, 87.3k daily high Sept 23, 88.8k rising upper 30-d Bolli

• Supt 85.1k Tuesday low, 84.7k the 10-DMA, 82.5k daily low Sept 28
BTC Chart:

(Paul Spirgel is a Reuters market analyst. The views expressed are his own.)

JP Morgan stays neutral in GBP/USD in the near-term.

"The recovery in EUR crosses since the poor open has continued somewhat but truth be told given the relaxation in the OAT spreads it is a little underwhelming. In a week where there will be little impetus apart from central banker talk it looks like we will remain limited to price action in fixed income (and oil) which is not a great place to be," JPM notes.

"Not much view here on sterling here, net flows have been pretty mixed, the cross is recovering from testing 0.8450/60 support, 0.8500/10 is resistance above. Cable remains pretty dull here in the 1.3145/60 - 1.3280/00," JPM adds.

Bank of America Global Research previews the FOMC minutes from the September meeting, due on Wednesday.

"Sep FOMC minutes should reveal the degree of hawkishness, appetite for further hikes, and views on recent inflation data.

The minutes should provide greater insight into the Fed's decision to raise rates in Sep. While the committee voted unanimously, investors will be looking for clues on whether there is meaningful disagreement over how much additional tightening may be needed," BofA notes.

"Does the FOMC view the move as a midcycle adjustment, or are there broader concerns that could warrant a full-blown hiking cycle? We also expect the minutes to shed more light on how policymakers interpreted the latest inflation data," BofA adds.

• AUD/USD rallied 0.6962-0.6979 overnight, neared the 10-DMA

• Sellers emerged after the 4-session high traded, NY opened near 0.6965

• The pair fell despite USD and US yields moving lower

• Drops in copper, silver also contributed to AUD/USD's move down

• Daily techs now warn that the rally off the October 1 low may be complete

• Daily RSI diverged on the high & a daily inverted hammer candle formed

• AUD/USD bulls likely need above 200-DMA, 0.7040/50 to gain some control
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• EUR/USD regains ground above 1.1200 from 16-month lows at 1.1161 on Monday as Oat/Bund spreads narrow

• However, French budget debates are not due until next week so overall recovery could be limited until then

• Relief rally so far extending to 1.1248 where its run in to mild resistance, potential for stops above Friday's high at 1.1261

• However, traders cite 1.1310/30 - where Thursday's breakdown began, as the most likely spot for fresh sales

• FX option prices are retreating from 7-month highs as the spot slide stalls, but shows caution, whilst also warning of 1.1000 risk
EUR/USD daily chart (EBS)

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Dollar index struggling to overcome the 200-WMA at 102.15

• Sep's rise from 98.60 halted at 102.28 before drop to 102.05

• The euro is 58% of the dollar index

• Traders are betting euro drops and decline has become stretched

• Dollar index rise is stretched at peak 20-week Bollinger bands

• Another GBP/USD short squeeze is brewing

•
USD index

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

Recent price action in FX options shows a market short of protection against deeper EUR/USD declines. The key levels to watch are 1.1100 and 1.1000, especially the latter, as that round level holds the biggest barrier and trigger-type options, which could leave the market more exposed to further losses.

Implied volatility gauges realised volatility, and it wasn't pricing the recent sharp EUR/USD fall. It has since repriced rapidly higher, from multi-year lows to its highest since March.

That came as EUR/USD fell on the firmer USD and then on French debt worries over recent weeks. On Monday, EUR/USD hit 1.1161, its weakest level since May 2025. Since mid-September, benchmark 1-month implied volatility has risen from 4.5 to 7.3, while the 1-year measure has increased from 6.0 to 7.3. Those are significant gains.

The break below the 1.1300 — and then 1.1200 — barrier options drove demand for implied volatility, especially downside strikes. Hedge funds bought large amounts of 6-12-month expiry digital EUR puts with strikes in the 1.0700-1.0600 zone as a cheaper downside hedge. That added to the option volatility short covering.

DTCC-traded options data shows a significant drop in the number of existing strikes below 1.1100, and an even bigger drop below 1.1000 (see chart). The market is clearly underhedged for sub-1.1000 levels. With volatility much higher, anyone needing cover now has to pay a much higher premium, which should help limit implied volatility setbacks.

Risk reversals remain a favoured way to hedge EUR/USD downside, hence the big rise in the volatility premium for EUR puts over calls. When spot dips, implied volatility rises and holders benefit.

If the 1.1100 and especially 1.1000 barriers give way, the FX options market could find itself short gamma. Dealers would have to chase EUR/USD lower while buying options. That would reward those already holding EUR puts, especially lower strikes, and could speed up the decline beyond what fundamentals justify.

For now, EUR/USD is consolidating above 1.1200 as the French ​spread against Germany narrows. Implied volatility has eased, with 1-month back at 6.5 from 7.3, but the market remains nervous. If EUR/USD comes back under pressure, FX options suggest 1.1100-1.1000 is where the decline could turn significantly more volatile.EUR/USD FX option strikes expiring between Oct 6 and Dec 31



EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals-

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD has traded a 14.5 pip range thus far Tuesday; 0.69625-0.6977

• 0.6977 is highest level since Sept 30 (0.69755 was Friday's high)

• It is also the peak since Thursday's 13-week low of 0.6904

• Offers likely pre-0.70 (0.6995 was Sept 30 high, before Oz CPI data)

• CFTC data showed net AUD short hit 9-month high in week to Sept 29

• Fed rate hold expected on Oct 28; RBA rate hold expected in November

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• German industrial orders fell 10.6% mm in August

• Orders were expected -1.05 mm

• Range of expectations from 24 polled was -5.0 to 1.5%

• EUR/USD which has been pummelled of late static near 1.12 in reaction

• Drop appears stretched with traders short looking for opportunities to buy

•
German industrial orders

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Cable eyes 1.3200 after extending south from 1.3232 (Asian session high)

• Bids under the figure have repeatedly propped GBP/USD since Thursday

• 1.3193 was Monday's London session low (after drop from 1.3238)

• Monday's Asian session low was 1.3191 (as EUR/USD fell to 17-month low)

• 1.3184 was Friday's low. 1.3182 was 14-week low on Thursday

• UK Sept construction PMI data due at 0830 GMT; 44.8 expected

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Shares of Australia's AusQuest rise as much as 4.8% at A$0.045, hitting their highest level since September 29

• Mineral exploration co says geophysical survey at its Cangallo copper project in Peru identified several new drilling targets

• Adds, according to the survey, the copper porphyry system is much larger than previously drilled

• Co believes these targets could increase the eventual copper resource at the site if drilling is successful

• Stock down 16% YTD

(Reporting by Shravya Marakini in Bengaluru)

• EUR/USD seeing some bounce in Asia after plunge to 1.1161 EBS yesterday

• Asia so far 1.1214-31, concerns still bounce could be of 'dead-cat' variety

• France fiscal-political concerns, concerns too over upcoming Spain elections

• Risk to remain down? USD still broadly bid across the board, upside limited?

• EUR/USD low yesterday weakest since 1.1131 May 29, 2025, key support?

• Break below 1.1100 could see moves even lower, 1.1065/89 lows May 12/13 '25

• Resistance from descending hourly Ichimoku cloud currently between 1.1252-76

• Cloud to fall later to 1.1217-48, if spot holds, likely move into cloud

• Also descending 100-HMA currently in cloud at 1.1270, 200-HMA 1.1321 above

• 50% retracement of 1.0125-1.2084 move February '25-January '26 1.1045 below

• Large option expiries today mostly to upside, 1.1245-50 total E1.2 bln

• Also between 1.1300-50 strikes total E2.6 bln+

• Recent EUR weakness seen likely to keep ECB from rate hikes at this time

• Related comments , , ,

• And , , also

• Related analysis , for more click on [FXBUZ]

EUR/USD daily:


EUR/USD hourly:


EUR/USD monthly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD -0.1% Tue, holding small wtd gains in CN holiday impacted markets

• AU Oct consumer sentiment falls sharply according to Westpac survey

• AUD 0.6928 52-WMA pivotal, clean break below will re-accelerate fall

• French debt concerns weigh on EUR; broader global bond sentiment negative

• U.S. Aug international trade due Tue, Reuters poll consensus -102.0 bln

• Range Asia 0.6963-735 support 0.6904 0.6865 0.6834, resistance 0.7282
AUD Weekly 52-WMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Higher US yields, broad USD strength buoying USD/JPY, at 157 highs

• Asia so far 157.85-158.00 EBS after 157.46-158.30 range yesterday

• Inside day likely with focus still more on EUR, EUR weaker still o/n

• JGB-US rate differentials below recent highs but still at recent wides

• Technically, USD/JPY holding in core range between daily Ichi kijun, 200-DMA

• Daily Ichimoku kijun flat still at 156.64, 200-DMA up tad at 158.51

• Support today from area of 157.88 hourly kijun, 100/200-HMAs 157.71/77 below

• Hourly Ichimoku cloud mostly flat and between 157.64-70

• Nearby option expiries today 158.00-10 total $1.5 bln, 158.25-80 $1.9 bln

• Below total $4.8 bln between 155.90-156.00 but out of market's range

• Related comments , , ,

• Also

• US markets , , ,
USD/JPY daily:


USD/JPY hourly:


USD/JPY nearby option expiries this week:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Shares of Australia's Great Southern Mining rise as much as 7.5% to A$0.022, posting their biggest intraday pct gain since September 23

• Gold explorer says initial soil sampling at its Glenburgh South project in Western Australia (WA) identified two gold anomalies

• Stock has fallen 46.3% this year, including day's move

(Reporting by Roshan Thomas in Bengaluru)

• NZD/USD +0.4% from Mon 0.5581 low, significant chart level holds 1st attempt

• 0.5581 the equal low traded in 18-months, also reached Nov 21 2025

• Oil prices ease, U.S. equities rise, bonds remain under pressure globally

• EUR/USD near 17-month lows amid French debt worry, DXY up 0.2% late Mon

• NZD pushing upper hourly Bollinger band, uptick likely to run out of steam

• 0.5845 post-'tariff-day' 2025 low looks to be in play as NZ sentiment sours

• Range NZ 0.55955-0.5606, support 0.5581 0.5485, resistance 0.5995 0.6012
NZD Hourly Bollinger Study & DXY Daily 55/100/200-DMA


NZD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Morgan Stanley Research previews the September FOMC minutes due on Wednesday.

"We and markets continue to decipher the new FOMC's reaction function," MS notes.

"The upcoming minutes may help show how patient or impatient FOMC members are for the return to target inflation, how much they've taken on oil price pressures as threatening that target, and how they're viewing the recent strengthening in growth and labor market indicators," MS adds.

• AUD/USD +0.5% from Mon 0.6933 low; Nasdaq hits record high & oil prices ease

• EUR/USD at 17-month lows amid French debt concerns, DXY finishes +0.2% Mon

• Global bond sentiment remains negative, UST yield curve steepens

• AUD may extend topside short term, but unlikely to break broader downtrend

• Sellers should emerge well ahead 0.7056 100-DMA, target break below 0.6900

• Overnight range 0.69435-735 support 0.6904 0.6865 0.6834, resistance 0.7282
DXY Daily 55/100/200-DMA


AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Cable softer during NY trade, but another 1.32 false break offers dip-buyers hope

• The pair continues to draw support from EUR/GBP cross selling

• However, rebound attempts remain shallow, keeping spot in consolidation

• Another lift in US yields (10y nearing 5.35%) underpins USD

• On the technical front, the 200-hour MA cluster at 1.3237-60 is also a cap on cable

• Additional hurdles sit at 1.3274 and 1.3300. Support comes in at 1.3140-60
GBPUSD vs 200-hour MA

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))