JP Morgan Research previews next week's June BoJ policy meeting.

"The BoJ is highly likely to raise the policy rate by 25bp to 1.0% at next week's monetary policy meeting, in our view. In April, uncertainty stemming from the Middle East conflict tilted the BoJ toward holding rates, and that uncertainty has not fully dissipated. That said, incoming data and information point to a resilient economy and rising upside risks to inflation," JPM notes.

"Markets are increasingly concerned that the BoJ is behind the curve. The BoJ will likely try to deliver a hawkish message to alleviate these concerns, with Governor Ueda likely to refer to the possibility of additional rate hikes at the press conference. However, since markets have already priced in further tightening, the hurdle for the BoJ's messaging to be perceived as hawkish is high," JPM. adds.

Sterling is poised for continued downside pressure against the U.S. dollar in the near term, as a confluence of geopolitical anxieties, domestic headwinds, and monetary policy divergence weigh on GBP/USD.

The recent shift to the lower end of its 1.33-1.35 range reflects heightened Middle East uncertainties, with the ongoing U.S.-Iran standoff casting a shadow despite discussions of a potential agreement. The ambiguity surrounding whether any deal would involve Iran relinquishing nuclear material adds to the caution. Beyond near-term geopolitical noise, structural headwinds for cable endure. The UK's political, fiscal, and economic landscape — characterised by inflationary pressures and sluggish growth — continues to weigh on sterling. The monetary policy convergence between the BoE and the Fed represents the more consequential driver. Although the BoE is expected to deliver modest rate increases of around 50-basis points in 2026, recent communications from BoE officials signal a cautious, data-dependent approach, with policymakers awaiting clearer evidence on second-round inflation before accelerating tightening.

This measured stance stands in contrast to decidedly more hawkish Fed expectations, underpinned by persistent U.S. inflation — a dynamic likely to cap GBP/USD gains even if a definitive Middle East peace deal is announced.

Technically, resistance for GBP/USD is identified at the daily cloud base around 1.3409 and the flat 200-DMA at 1.3419. More significant resistance lies in the 1.3500/09 region, marking late-May highs. Support is anticipated around recent lows at 1.33, with the 100-WMA at 1.3184 offering further downside protection, having tracked the price since early March 2025.
Sterling Chart:


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

Goldman Sachs flags downside risks for EUR and prefers shorts on the EUR crosses.

"We think EUR-x shorts are going to be back on the agenda at some point soon, with EUR/CHF a very valid candidate. You have an ECB now that is going to be reluctant to hike, and hiking into a growth slowdown, and EUR is a currency that the market likes to attack from a positioning standpoint when you are hiking into that kind of slowdown," GS notes.

"On a longer-term basis, the other side of that trade is probably going to be an EM currency, but if you had to choose something in the G10 space to go against a EUR short, it would probably be long AUD or long NZD. A final point is on short NOKSEK structures: it is something being traded actively at the moment, given the downside optionality there - in cash, there has been adding back to this move above parity," GS adds.

HSBC Research discusses EUR outlook and sees growing downside risks.

"EUR-USD has proved relatively steady despite geopolitical angst. We still see scope for a modest move higher towards 1.18, but the support is narrow: risk appetite is doing most of the heavy lifting and the market remains anchored on near-term ECB hikes. That combination can hold in benign conditions, yet energy remains the near-term risk. Anoth oil or gas squeeze would quickly reopen the EUR's terms-of-trade vulnerability," HSBC notes.

"Further out, the balance of risks still leans against sustained EUR strength. A deteriorating export engine weakens fundamental EUR support, while political risk could rotate back to Europe as the April 2027 French election approaches. Put simply: the EUR can stay stable while the world is co-operative, but it's likely to underperform if energy tightens, growth softens, or markets start pricing earlier-than-anticipated ECB easing in 2027," HSBC adds.

• AUD/USD rallied to 0.7012 overnight, sellers then emerged & the pair turned lower

• The pair fell despite rallies in gold, silver, equities & a drop in US yields

• Broad based USD buying weighed and sent AUD/USD down to 0.6987

• NY opened near 0.6995, AUD/UDS traded down -0.03% in early action

• The pair traded below the 61.8% Fib of 0.6834-0.7277 rally & trend line off Dec. 18 low

• Falling monthly RSI, June price drop following May doji are bearish tech signals

• US jobless claims, May PPI final demand are data risks in NY's morning
audusd


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

• FX options are forward-looking and thrive on FX volatility and any shifts in directional outlooks

• Recent price action in AUD/USD options suggest growing angst from participants on both measures

• Comes amid Inflation concerns, falling stocks and Mid East conflict escalation

• Implied volatility has increased - benchmark 1-month expiry is up almost 1.0 since Fri's NFP beat to 8.25

• Contract now sits above 1-month daily realised volatility 7.75 - often used as a fair value measure

• 1-week implied vol spikes as June 17 Fed enters expiry window, signalling elevated realised volatility risks

• 1-month 25 delta risk reversals have doubled to 1.2 AUD puts over calls since late May

• That's the highest downside over upside strike AUD/USD volatility risk premium since April
AUDUSD 1M VOL


AUD/USD 25 delta risk reversals


1-week expiry FXO implied volatility


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

• Long gamma positioning could turn short if and when 161.00 barriers/triggers are taken out - dealers warn

• Long gamma is suppressing option implied volatility and helping to restrict actual/realised volatility

• A shift to short gamma would see those with exposure needing to buy spot and volatility would typically increase

• Recent sessions have seen increased demand for option strikes above 161.00 and even 162.00

• They would benefit from a topside breakout and increased volatility - realised and implied

• Demand for such options would suggest traders are hedging for a higher BoJ intervention threshold

• USD/JPY upside remains hard fought, but BoJ and Fed policy meetings add another layer of risk next week
JPY=EBS


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

June 11 (Reuters) - The franc's recent losses could snowball if Switzerland votes in favour of a proposal to implement a population cap, with scope for EUR/CHF to climb to 0.94. Some have likened Sunday's vote to a "Swiss Brexit", with many businesses fearing an economic blow should the proposal succeed. A poll published last week showed 52% are against the population cap proposal. A previous poll carried out at the end of April showed the Swiss evenly split on the issue.

The event risk of this weekend's referendum is weighing on the franc, with EUR/CHF rising to an EBS high of 0.9234 on Wednesday, its highest level since April 30.

EUR/CHF most recently threatened 0.94 last December, with 0.9350 marking the 2026 high on January 14. (EUR/CHF briefly traded below 0.90 in March, for the first time since the 'Frankenshock' in 2015, after the safe-haven franc strengthened on conflict in the Middle East.)
EURCHF


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

• Markets fully price a 25bps ECB hike Thursday to 2.25% — leaving little room for a surprise reaction

• FX options signal muted EUR/USD reaction to ECB — latest pricing and demand reflect low conviction on a move

• Overnight implied vol at 9.0 barely above pre-ECB inclusion levels — market not bracing for a big swing

• The premium/break-even for a simple vanilla straddle at 9.0 is 43 USD pips in either direction

• Dealers flag June 17 Fed decision — Warsh's first as Governor — as the real volatility risk event driving demand

• 1-week implied vol gains confirm it: the Fed, not the ECB, is where traders are seeking volatility protection

• EUR/USD downside hedging dominates — 1-month risk reversals at their most bearish since April

• For now EUR/USD is well contained within a 1.1500-1.1580 range since hitting the lower level after Fri's NFP beat
Overnight expiry EUR/USD implied volatility


1-week expiry FXO implied volatility


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

• Cable has traded a 40 pip range thus far Thursday; 1.33505-1.33905

• 1.33505 is also the low since 1.34235 intra-week peak Wednesday

• Wednesday peak was scaled after cooler than expected 0.2% U.S. May core CPI print

• Ensuing drop to 1.33505 influenced by Middle East tensions (USD is safe-haven)

• U.S. and Iran trade attacks for a second day; oil prices rise

• U.S. becomes world's top oil exporter. UK April GDP data due on Friday

GBPUSD


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

• Shares of Core Lithium rise as much as 6.3% to A$0.255, their biggest intraday pct gain since June 1

• Company proposes to divest and spin out certain Northern Territory and South Australian exploration assets to create a new gold exploration firm named Axiant Resources

• The new venture will be divested via an initial public offering, and prospectus to be lodged with regulator ASIC in the third quarter

• Malcolm McComas appointed as Core Lithium Chairman as Greg English retires to become Axiant Chair

• YTD, Core Lithium shares down 7.3%

(Reporting by Nichiket Sunil in Bengaluru)

• AUD/USD -0.6% wtd as RBA rate expectations soften & geopolitical woe grows

• Futures pricing implies 99% probability RBA leaves 4.35% OCR unchanged Tue

• U.S. strikes targets across Iran, Trump threatens further escalation

• U.S. initial jobless claims (poll 219k) and May PPI due Thur

• AUD targeting 0.6834 support, break below would be extremely bearish

• Range Asia 0.6987-0.7003, support 0.6834, resistance 0.7080 0.7200
AUD Weekly 52-WMA

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

• GBP/USD up 0.1% in Asia after trading in a 1.33505-1.33905 range

• Rebounds from Iran-U.S. escalation-led drop on dip buying

• 2% rally in WTI crude, sharp decline in Asian stocks shrugged off

• 1.3300-1.3500 range likely to hold into upcoming risk events

• US PPI Thu key for Fed expectations ahead of June 17 rate decision

• UK April GDP Fri; May inflation, retail sales, April employment next week

• BoE rate meeting, Makerfield election key on June 18

• Resistance 1.3420, 1.3450, support 1.3350 1.3300-10; Thu range 1.3367-1.3423
us Inflation gauges

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

• Australia's gold stocks fall as much as 5.1% to their lowest level since September 10, 2025

• Gold hit a more than six-month low on Thursday, as fresh U.S. strikes on Iran drove oil prices higher, deepening concerns around inflation and higher-for-longer interest rates [O/R]

• Gold miners Northern Star Resources and Evolution Mining down 1.9% and 1.3%, respectively

• Activist investor Elliott Investment Management called on Northern Star Resources to rebuild its strategy to restore shareholder value by strengthening its board and undertaking a strategic review

• Sub-index down 23.8% this year, including the day's move
(Reporting by Sherin Sunny in Bengaluru)

• AUD/USD flat Thur but downside bias remains as U.S.-Iran war re-escalates

• Brent crude +2.3% to $95.20 a barrel after Iran re-emphasises Hormuz closure

• Explosions across Iran reported after U.S. flags strikes on key facilities

• U.S. initial jobless claims (poll 219k) and May PPI due Thur

• Futures pricing implies 99% probability RBA leaves OCR unchanged Tue

• Next AUD target 0.6834 support, break below would be extremely bearish

• Range Asia 0.6987-0.7002, support 0.6834, resistance 0.7080 0.7200
AUD Hourly Bollinger Study & DXY Daily 55-DMA


AUD Weekly 52-WMA

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

• Broad USD strength amidst renewed Middle East hostilities buoying USD/JPY

• USD/JPY up to 160.58 EBS yesterday, Asia so far this morning 160.52-56

• Continuing gradual push up on 160 handle, no Japan FX intervention yet

• Seems MOF holding on to ammunition, to act in concert with BOJ

• BOJ 25 bp hike already discounted, question is if BOJ will do more?

• Includes possibility of a larger hike, telegraphing July hike too

• Of interest will be Gov Ueda's absence, effect, conspiracy theories galore

• USD/JPY currently holding near hourly Ichimoku tenkan at 160.51

• Hourly kijun 160.41, cloud 160.15-29, ascending 100-HMA 160.24 in cloud

• Option expiries today supportive, total $2.6 bln between 160.00-25

• $724 mln near current spot between 160.50-98, 161.00-25 $949 mln

• JGB-US Treasury 2-year rate differentials still on wide around 271 bps

• Related comments , , ,

• Also , on BOJ Ueda

• US markets , , ,

• On US-Iran , , ,

• On US economic data , , for more click on [FXBUZ]

USD/JPY:

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

• AUD/USD -0.5% from Wed 0.7037 high as negative sentiment continues to build

• Scant support ahead 0.6834 puts AUD at risk of accelerating downturn

• U.S.-Iran peace deal hopes evaporating, Trump flags intensified attacks

• Hegseth says U.S. to target key facilities, explosions reported across Iran

• U.S. May CPI 4.2% y/y, mainly driven by heightened energy prices

• Futures pricing implies 98% probability RBA leaves OCR unchanged Tue

• Overnight range 0.69946-0.7037, support 0.6834, resistance 0.7080 0.7200
US CPI


AUD Daily 55-DMA

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

Morgan Stanley Research previews the UK monthly GDP report on Friday.

"We expect decent payback across services categories, following very robust February and March data. Such a pattern fits with what we have previously seen in 2Q figures. Manufacturing-wise, PMI data seems to suggest a healthy impetus for the sector in the form of front-loading activity due to concerns around shortages later in the year. Hence, we model a healthy 0.4%M pick-up in industrial production," MS notes.

"We do see a sharp correction in construction activity, however. On net, we see a 0.2%M contraction, with balanced to mildly downside risks around this number. We see 2Q GDP growth at 0.1%Q," MS adds.

The dollar traded mixed on Wednesday as the market was pulled in different directions by U.S. inflation that failed to live up to investors' worst fears and rising tensions between the United States and Iran. Monthly core and headlineinflation came in at or below forecasts while the annual figures rose as expected, remaining well above the Fed's 2% target. Meanwhile, President Donald Trump said the U.S. would attack Iran again "very hard" following one of the most significant exchanges of fire overnight since an April ceasefire, accusing Tehran of taking too long to negotiate a deal.

U.S. Treasury yields were steady to higher with the 2s-10s curve steepening by 1.65bps.

The S&P 500 nursed a loss of 1.34% by New York afternoon as Wall Street extended declines, with technology stocks remaining under pressure, while the renewed tensions between the United States and Iran overshadowed the inflation reading. Brent and WTI crude both rallied 2%, fueled by the rising Iran tensions and a larger-than-expected drawdown in U.S. crude inventories.

Gold tumbled 3.75% on worries about Iran war spillover into inflation, and copper fell 1% on the hostilities.

Heading toward the close: EUR/USD +0.05%, USD/JPY +0.07%, GBP/USD +0.01%, AUD/USD -0.24%, DXY +0.02%, EUR/JPY +0.12%, GBP/JPY +0.08%, AUD/JPY -0.2%.(Burton Frierson)

• USD/JPY stuck in a tight range; U.S. CPI a non-event for price action

• Underlying bid intact, grinding higher amid ongoing Middle East geopolitical noise

• Trump rhetoric on Iran adds to the backdrop

• Upside truncated by persistent MoF/BoJ intervention risk keeping topside in check

• 160.73 (YTD high) remains the near-term hurdle; clean break opens 162 (multi-decade high)

• Risk-reward still leans against chasing USD/JPY higher given intervention risk
USDJPY hour


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

SEB Research previews the June ECB policy meeting on Thursday.

"Inflationary risks from higher energy prices will result in a preemptive rate hike by 25 bp. However, the ECB is likely to signal that they are datadependent and not pre-committing beyond June. Indirect and second-round effects from the war in the Middle East are not evident in data yet, and they are key for the ECB’s interest rate decision going forward. However, service inflation continues to be elevated," SEB notes.

"We will pay extra attention to forecast revisions as well as updated scenarios due to the war in the Middle East," SEB adds.

• Shares of gold miners fall, tracking a decline in bullion prices [GOL/]

• Spot gold down 3.3% at $4,119.79/ounce, its lowest level since March 23

• Bullion prices remain near a more than two-month low after cooler-than-expected U.S. inflation data, as traders shift focus to the risk of a wider U.S.-Iran regional war

• Top miners Newmont and Barrick Mining down 3.3% and 2.5%, respectively

• U.S.-listed shares of South African miners Gold Fields , AngloGold Ashanti and Sibanye Stillwater

down between 3.6% and 5.3%

• Canadian miners: Agnico Eagle Mines down 3.6% and Kinross Gold falls 3.3%

(Reporting by Sumit Saha in Bengaluru)

Bank of America Global Research prefers downside EUR/USD exposure through this Summer,

"There is a case to be made for EUR/USD to potentially trade through our Q2 forecast of 1.14, which is also just below its 12-month lows. The growth divergence between the US and EA is notable and arguably being underpriced by rates markets," BofA notes

"But hope for a peace agreement in the Middle East has prevented larger themes from taking hold. Even as there has been some associated reprieve in energy markets, upside risks points to downside risks to the EUR (from a terms-of-trade perspective). This suggests a real possibility of further USD supportive Fed repricing, while ECB hikes could prove counter-productive for the EUR... We prefer to fade rebounds and continue to look for renewed downside.," BofA adds.

AUD/USD traded near flat on Wednesday despite a weaker U.S. dollar and falling Treasury yields following the May CPI report, suggesting the U.S. economic data alone wasn't enough to support the pair.

Investors holding short positions may soon be rewarded, as the pair hit a fresh two-month low of 0.6998, briefly piercing both the uptrend line from the December 18 daily low and the 61.8% Fibonacci retracement of the March 31 to May 6 rally. While the pair managed to bounce from those levels, downside risks remain firmly intact.

Commodity markets are adding to the bearish case. Gold has been trending lower since April 17, silver since May 13, and copper's broader uptrend has stalled — all of which have weighed on AUD/USD since its mid-May high. Gold and silver are now approaching their March 23 daily lows, and a break of those levels could intensify selling pressure on the pair.

From a technical standpoint, the signals remain decidedly bearish. AUD/USD is trading below the daily Ichimoku cloud and the 10-, 21-, and 55-day moving averages. Monthly RSI points to entrenched longer-term downward momentum, and June's price decline following May's monthly doji candle reinforces the negative outlook. Should the pair make a clean and sustained break below the 0.7000 support zone, the next key target would be the March monthly low.
audusd


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