• EUR/GBP holding firm above the 0.8600-15 support zone

• Iran deal optimism a net EUR positive, strips out some oil-driven headwind

• UK local election is the key GBP event - Labour wipeout is consensus, so limits shock value

• Eyes on Starmer exit odds as any material build in those and GBP sellers likely emerge

• If political noise escalates, 0.87 comes into play quickly, with 0.88 also on the radar

• For now, the cross is still in a range trade with extremes being faded
eurgbp daily chart


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

• Cable has traded a 16.5 pip range thus far Thursday; 1.3590-1.36065

• Those parameters are well within Wednesday's 1.3579-1.36435 London session range

• Iran reviews U.S. peace proposal. Trapdoor creaks for dollar if Iran war ends

• Voting underway in UK local elections: polls close at 2100 GMT (results Friday-Saturday)

• Ladbrokes shortens odds for Andy Burnham to be next Labour Party leader

• BoE's Lombardelli due to speak at 0800 GMT; Mann due to speak at 1420 GMT

GBPUSD


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

• EUR/USD 1.18 on Feb 27 almost unchanged by Mid East war

• Slump and boom for MSCI equity index making no impression

• Much higher oil prices have not moved EUR/USD

• Traders have unwound 2nd largest euro long on record

• EUR/USD still stuck at centre 2026 range 1.2084-1.1409

•
EURUSD


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

• Australian gold miners rise as much as 4.4%, marking their biggest intraday pct jump since April 8, after the bullion rose for a third consecutive day

• AXGD at its highest level since April 29

• Gains in gold were supported by a softer dollar as hopes grew for a Middle East peace deal after Iran said on Wednesday it was reviewing a U.S. proposal that sources say would formally end the war [GOL/]

• Shares of Evolution Mining surge 5.5% and Northern Star Resources gain 3%

• Sub-index down 6.6% YTD, primarily from losses in March after the Iran war began in late-February

(Reporting by Shruti Agarwal in Bengaluru)

• Bellevue Gold rises as much as 4.8% to A$1.63; on track to log steepest intraday pct rise since April 15

• Stock hits highest since April 28

• Gold explorer says it is on track to meet FY26 production guidance of 130-150koz

• Production growth expected FY27 onwards from higher-grade mining areas at Deacon, Deacon North & Viago established in FY26

• BGL down 7.5% YTD

(Reporting by Anjali Singh in Bengaluru)

• GBP/USD stays supported in Asia after closing 0.4% higher Wednesday

• Underpinned by buoyant risk appetite on Iran peace hopes

• UK local elections eyed Thursday, Labour faces possible leadership change

• Options market shows muted volatility expectations for GBP around elections

• UK private sector pay awards held at 3.5% in 3 months to March- IDR survey

• UK construction activity tumbles as Iran war pushes up costs- RICS survey

• Resistance 1.3640, 1.3660-70, support 1.3560, 1.3535-40, 1.3510-15

• Wednesday range 1.3541-1.36435, Asia range 1.3590-1.36065
UK unemployment rate and wage growth:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +0.1% Thur, imports surge 14.1% in Mar while exports fell 2.7%

• AU Mar balance on goods 1.84 bln deficit (Reuters poll consensus +4.1 bln)

• Risk appetite ascendant amid hopes for formal U.S.-Iran peace deal

• Iran considering proposal to end war, reports suggest key issues unresolved

• AUD likely to challenge major 0.7283 resistance, stop loss buyers above

• Crucial U.S. Apr non-farm payrolls due Fri, Reuters poll consensus +62k

• Range Asia 0.72325-42, support 0.6834 0.6660, resistance 0.7283 0.7661
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• USD/JPY steady in Asia as Japanese markets return from Golden Week holiday

• Traders remain on intervention watch after JPY again surged suddenly Wed

• Was the fourth sudden yen surge in the past week, leaving traders nervous

• Japan forex czar says IMF floating rate label does not limit currency action

• Many BOJ board members saw need to raise rates if Iran war prolongs-minutes

• U.S.-Iran peace hopes cap upside, fading Fed rate cut bets limit downside

• Resistance 156.55-60, 157.00-10, support 156.00-05, 155.50-60

• Wednesday range 155.00-157.93, Asia range 156.22-156.53
Japan has recently had some success with currency interventions:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• NZD/USD +1.3% from Wed 0.58815 low amid U.S.-Iran peace deal optimism

• Break above 0.5930 resistance after multiple failed attempts opens topside

• Iran reviewing proposal to end war, reports suggest key issues unresolved

• Iran's Ebrahim Rezaei says "closer to an American wish-list than to reality"

• Brent crude down 7.8%, gold +3.0%, broad USD index down 0.5%

• Pivotal U.S. Apr non-farm payrolls due Fri, Reuters poll consensus +62k

• Range NZ 0.59539-60, support 0.5680 0.5580, resistance 0.6090-95 0.6120
NZD Daily 55-DMA

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

• AUD/USD finishes Wed +0.7% after reaching highest level since Jun 3, 2022

• 0.7280-85 resistance tough to break, but would trigger next leg higher

• Risk sentiment buoyant amid climbing hope for end to U.S.-Iran hostilities

• Iran reviewing formal proposal to end war but leaves key issues unresolved

• Iran's Ebrahim Rezaei says "closer to an American wish-list than to reality"

• AU Mar balance on goods due Thur, Reuters poll consensus 4.1 bln surplus

• U.S. Apr non-farm payrolls due Fri, Reuters poll consensus +62k

• Overnight range 0.7225-77, support 0.6834 0.6660, resistance 0.7283 0.7661
AUD Daily 55-DMA


AUD Weekly 52-WMA

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

JP Morgan on EUR/USD setup ahead of the US April jobs report on Friday.

"The euro building some decent support sub 1.17 here, not sure it means we rally out of sight without news but clearly some demand in front of the 200 day, whilst the view is one of pessimism towards European growth and people are short on the crosses on that narrative," JPM notes.

"All this make for an uninteresting setup in EURUSD itself for the time being as we battle the continuous back and forth and with payrolls upcoming don't think we go too far from here unfortunately, if you are bullish you know where the stop level is now," JPM adds.

• GBP$ a tad firm in NY afternoon trading, +0.39% at 1.3591; Wed range 1.3643-1.3541

• Early cable rise, on upbeat Mideast peace progress, near trend high 1.3658 pared

• Pres Trump noted talks not particularly far along tempered rise, pair pulled back sub-1.36

• Sterling bulls continue to struggle near 1.36, unable to hold gains above

• Peace progress stirred broad risk rise; equities, industrial/precious metals soar, oil dipped

• Fiscal concerns abating UK 10yr gilt yield below 5%; Thursday UK local elex in focus

• GBP$ res 1.3643 Wednesday high, 1.3658 daily high May 1, 1.3702 upper 30-d Bolli

• Supt 1.3556 daily conversion line, 1.3541 Wednesday low, 1.3476 bruised 100-DMA

GBP$ Chart:


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

• AUD (+0.7%) hovering near-four year highs on rising Iran deal optimism

• U.S. and Iran closing in on a MOU to end the war was the catalyst

• Focus shifts to Iran's response thus there remains caution on appetite to chase

• Close above 0.72 would embolden bulls, setting up for a 0.73 test

• While shallow dips encourage the view that risks remain higher for now
AUDUSD hourly chart


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

ANZ Research previews next week's US April CPI report on Tuesday May-12.

"April Consumer Price Index (CPI) data will continue to show accelerating annual headline inflation, reflecting higher energy prices. We estimate headline CPI rose 0.8% m/m (3.9% y/y) in April, matching the 0.8% m/m (3.3% y/y) pace in March. If data are in line with our forecasts, headline inflation would be at its highest since mid-2023. We expect core CPI rose at a modest 0.2% m/m pace (2.6% y/y) in April," ANZ notes.

"Domestic gasoline prices in the US have surged nearly 40% since February. We expect its direct impact will push transportation and related fuel prices higher. Meanwhile, underlying drivers of services inflation such as wages and rents have remained soft. This underpins our view that headline and core inflation will show divergent trends," ANZ adds.

By Justin McQueen

May 6 (Reuters) - Resurgent optimism over a possible Iran peace deal has produced a constructive tone for EUR/USD, but it is still stuck in a well-trodden 1.1675-1.1800 range for now and a lot of diplomacy lies ahead.

Developments in the Middle East are dictating the state of play across FX, while market participants are assessing price action in USD/JPY that has raised suspicions about another round of intervention in the yen.

Intervention has not been confirmed, but the move and volume are consistent with prior episodes. On balance, USD topside appears capped despite U.S. data remaining robust.

Focus now shifts to Iran’s response – expected within the next 48 hours – to the U.S. proposal which will set the tone going forward. Eyes are on oil as a real-time geo risk barometer, which for EUR has been the cleanest indicator for near-term direction.

Positioning is still light, so a more concrete deal outcome has room for EUR longs to build. A break above 1.1800 would open the way to resistance at 1.1830, and clearing that would bring 1.19 into focus in short order. On the downside, the 200-day moving average is the floor for now.
USDJPY 30 minute chart


EURUSD pos


eurusd hourly chart


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

Credit Agricole CIB Research discusses the latest IMF warning about the scope of Japan's losing its free-floating status.

"The IMF has warned that Japan risks losing its if it intervenes in its exchange rate more than three times in six months and/or each intervention phase lasts more than three days. Japan's Finance Minister Satsuki Katayama has also recently referred to the IMF rule, but also maintains that authorities stand ready to take bold action against speculative action in FX. According to the IMF rule, Japan can conduct only two more interventions lasting three days or less before November," CACIB notes.

"Investors have taken these headlines as a greenlight to push USD/JPY back higher and above the 157 level we have previously referred to as the new line in the sand for the MOF. Indeed, when approaching 158 today in Asia, USD/JPY suddenly fell by over 1.5% suggesting another round of FX intervention. It is the final day of Japan's public holidays, but liquidity could remain low the rest of the week as Japanese extend their holidays to the rest of the week. We continue to think this lower liquidity offers opportunity for effective FX intervention," CACIB adds.

• AUD/USD (+0.7%) firms, back above 0.7200 to maintain a constructive tone

• Multiple topside failures at this level suggests that the close matters

• Initial USD weakness on suspected JPY intervention, keeping a lid on USD

• Middle East headlines also adding a risk-on bid, helping AUD extend higher

• Dips well-supported throughout the session, thus the bias stays tilted higher near-term
AUDUSD hourly chart


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

Goldman Sachs Research discusses the scope of BoJ and SNB interventions.

"SNB President Schlegel was pretty clear yesterday in doubling down, sticking to the line that they have 'increased willingness to intervene'. That's surprising to us based on how little they usually intervene in the currency when Swiss inflation is at these levels.

But in a similar fashion to the MOF on USD/JPY where intervention is pushing against fundamental drivers currently, it's harder to see how intervention alone can dictate levels in either EUR/CHF or USD/JPY, even if the recent behaviour does reveal a slightly different policy function," GS notes.

"Tactics will be key, but in both cases we think the macro should ultimately win out over FX management, keeping USD/JPY bid and applying downward pressure on EUR/CHF," GS adds.

Bank of America Global Research previews the US April jobs report on Friday.

"After job growth came in above all expectations in March, we look for April NFP to print at a solid 80k (private: 90k), which would be comfortably above breakeven. Education & health will continue to lead job gains. With claims remaining benign and the weekly ADP data inflecting upwards, risks are tilted to the upside," BofA notes.

"We expect the u-rate to remain at 4.3%, with risk of rounding down to 4.2% along with LFPR at 61.9%. A 4.3% or lower u-rate would leave the Fed comfortably on hold in the near term amid rising inflation risks," BofA adds.

GBP/USD finds itself in a curious position - sufficiently supported to resist a meaningful selloff, yet lacking the energy to break decisively higher. FX options implied volatility hovering near pre-conflict lows tells the story plainly, especially given that realised volatility trades below it. This is a market that has run out of things to worry about, at least for now.

FX options risk reversals echo that mood. They gauge the relative cost of volatility protection in one direction versus the other, pricing in an implied volatility premium where greater risk is perceived.

GBP/USD risk reversals carry a long-standing implied volatility premium for the right to sell GBP/USD over the right to buy it, but that premium sits near the low end of its long-term range - it reads less as conviction and more as habit.

Dealers note some mild demand for short-dated protection covering the May 7 UK local elections, though even that feels more like routine hedging than genuine fear. A poor performance by the ruling Labour party is already in the price, which caps how far any disappointment can travel.

On the downside, the market has its anchors. Strong bids cluster near the 100-day moving average at 1.3475, with the Tuesday–Monday lows at 1.3514 offering a first line of defence. Bulls, for their part, can point to the January 27 multi-year high at 1.3867 as a target worth chasing - but chasing requires fuel.

And that is precisely what is missing. With realised volatility trailing implied, ranges tight and catalysts thin, GBP looks set to remain range-bound until something forces the market's hand. For now, the path of least resistance is sideways.
GBP=D3


GBP/USD FXO implied volatility


GBP/USD 25 delta FX option risk reversals


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

• Dealers report one buyer of 2-week expiry 152.00 JPY call/USD put option on USD 500 million Wednesday

• Given that the average FX option trade is USD 30 million, this is a notably large trade. Implied vol was 12.0

• Option will increase in value if spot lower/implied vol higher and end in profit if spot below strike at expiry

• If spot was 155.90 when struck, the premium would have been around 28 JPY pips or 0.18% of USD

• The latest suspected intervention saw USD/JPY drop 157.82-155.00 in Asia - options right to stay cautious

• Related comment - Japans costly JPY defence can only buy time (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Correction and consolidation follows 1.0125-1.1.2084 EUR/USD surge

• The 21-DMA has crossed over the 100-DMA - buy signal

• Same signal shortly after EUR/USD began rising last year

• Far less to stop a rise after bullish bets slashed from $27bln to $5bln

• Targets: 1.2157, 1.2388, 1.2620, 1.2949 and 1.3368

• USD sell signal imminent - targets for a drop

•
EURUSD buy signal and targets


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

• AUD/USD consolidates gains to 0.7250, its highest level since June 2022

• Ascent to 0.7250 fuelled by US-Iran deal hope, Kospi surge (AUD is risk-sensitive)

• Trump pauses effort to escort ships in Strait of Hormuz, citing deal progress

• Iran says it wants a "comprehensive agreement" with U.S.

• 0.7228 (May 1/4 highs) and 0.7200 are now AUD/USD support points

• NAB expects RBA to raise interest rates again in June

AUDUSD


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

• USD/JPY slumped from 157.93 to 155.00 in Asia, on Wednesday, before partially rebounding

• Yen jumps suddenly as intervention speculation swirls

• The thin market exacerbated the move as Japan closed for "Golden Week" on Wednesday

• Drop took out the 155.50 Fibo, a 61.8% retrace of the 152.28 to 160.72 (February to April) EBS rise

• The 61.8% retracement is known by some as the "golden ratio", significant in determining direction

• A failure to register a Wednesday close below the 155.50 Fibo would provide encouragement to bulls

• 30-day log correlation between USD/JPY and EUR/JPY is back above +0.5 (pairs are moving in tandem)

Daily Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)