• NY opened near 0.7170 after AUD/UD traded 0.7223-0.7140 overnight, the pair fell again

• US yield , rates gains helped USD add to overnight gains

• Gold, silver, copper & stocks fell while USD/CNH rallied as risk-off dominated

• AUD/USD fell to 0.7144 then bounced as the USD softened after Europe's close

• 0.7160 was neared, the pair was down -0.82% for the day in NY's afternoon

• AUD/USD traded down nearly -1.2% for the week heading into the weekend

• Techs lean bearish; RSIs indicate downward momentum, pair below 10- & 21-DMAs

• A monthly inverted hammer is in place for May, reinforces bearish signals
audusd


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

Credit Agricole CIB Research discusses the USD liquidity outlook.

"The USD liquidity glut may be starting to ease, as highlighted by the renewed modest widening of the USD cross-currency basis swap spreads. The glut could dissipate further in part given the increase of US Treasury cash holdings at the Fed that reflects growing UST issuance and thus could drain more market liquidity. The Middle Eastern conflict could keep energy prices and US rates bid as well and thus help drain more USD liquidity," CACIB notes.

"Against this backdrop, we expect USD-positive FX flows – resulting from investments in US stocks, USTs and/or FX carry trades – to gain in importance as FX market drivers too, in a boost to the USD across the board. A potential easing of the USD liquidity glut in coming days could further magnify the FX market impact of the incoming data releases," CACIB adds.

USD/JPY bulls retain the upper hand so long as the Bank of Japan is seen as falling further behind the curve as debt loads are growing.

Markets are increasingly recognizing that central banks, broadly, may be too accommodative given persistent inflation pressures, elevated energy prices, fiscal stimulus measures, and record-high equity markets.

This backdrop is steepening yield curves globally, pushing long-end yields toward multi-decade highs.

Rising back-end yields alongside high inflation create particular concern for yen bulls, as they intensify scrutiny over the sustainability of Japanese government finances.

That pressure is compounded by the prospect of increased foreign corporate issuance such as Alphabet tapping the yen bond market and likely converting proceeds into dollars.

While intermittent FX intervention has helped slow the yen’s depreciation, officials have recently remained quiet, allowing USD/JPY to grind higher within the daily cloud of 156.37-158.91 as markets absorb previous dollar sales.

But the broader structural backdrop, including Japan’s commodity import dependence and debt financing of defense and AI investment, remains yen-negative.

With sizeable option expiries near 159 set to roll off, spot could resume its climb toward and potentially beyond 160, a risk increasingly reflected in options pricing if congestion above 159 fails to cap .

A more decisive shift in BOJ policy is needed to alter bearish yen sentiment, and an earlier-than-expected rate hike cannot be ruled out.
Yen


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

SocGen Research sees a scope for the USD rally in the near-term.

Sterling continued its descent on Friday and is likely to remain under pressure in the coming weeks as intensifying UK political instability and fiscal concerns clash with a more austere global inflation backdrop, particularly in the U.S.. Cable hit a fresh five-week low of 1.3329 during European trading. The currency is reeling from heightened domestic uncertainty following a bevy of high-profile Labour resignations from Prime Minister Keir Starmer’s government, including Health Minister Wes Streeting. Compounding sterling's woes is the resurgence of U.S. dollar strength. Recent above-forecast U.S. CPI and PPI data, coupled with climbing oil prices, have solidified a persistent inflation outlook. This shift has bolstered expectations for a Federal Reserve rate hike in Q4, fundamentally altering the relative global rate path. While the U.S. inflation spike may foreshadow similar pressures in the UK—raising BoE hike expectations for H2 2026—the immediate focus remains on narrowing Fed-BoE policy expectations.

Market sentiment is pivoting as the previously dovish 2026 Fed path, fueled by expectations that new Chair Kevin Warsh would follow Donald Trump’s preference for lower rates, loses traction. High oil prices necessitate a more hawkish stance to prevent an inflationary spiral.

Technically, GBP/USD faces a daunting climb. Resistance is clustered between the 200-DMA at 1.3426 and the 100-DMA at 1.3481, former support levels. Further gains would target the 21-DMA at 1.3526.

On the downside, support is critical at today's low of 1.3329, which aligns closely with the lower Bollinger band at 1.3323 and the daily cloud base at 1.3322. A break below these levels could signal a further acceleration of the current downtrend toward late-March lows below 1.32.
GBP Chart:


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

Bank of America Global Research discusses its EUR outlook and trading bias in the near-term.

"EUR-G10 FX price action this year has been broadly in line with recent history. EUR screens as overvalued vs NZD and, to a lesser extent, CAD, GBP, SEK, and as slightly undervalued vs JPY, NOK, AUD. EUR-USD has been in line with recent history," BofA notes.

"Our commodities team sees energy markets as pricing a best-case scenario. Combined with strong US data, this keeps us cautious on EUR-USD near term. We would not rush to buy EUR vs JPY, nor sell vs GBP, given somewhat underpriced UK political risks. Meanwhile, SEK remains our preferred de-escalation hedge, also supported Sweden's fiscal stimulus," BofA adds.

ANZ Reserach summarizes its key FX outlook for the coming week.

"The meeting of presidents Trump and Xi has yet to deliver market-moving outcomes. The USD strengthened this week, driven largely by renewed weakness in JPY and GBP. In contrast, the AUD has held up much better," ANZ notes.

"We expect the AUD to remain a relative outperformer, underpinned by its carry advantage and energy-exporter status, which is an increasingly relevant parallel with the US. Elevated risk appetite reinforces this backdrop: our ANZ Risk Sentiment Index is at an all-time high, providing ongoing support for high-beta FX. JPY and GBP remain structural underperformers. Both are net energy importers facing fiscal uncertainty, while GBP also carries a persistent political-risk premium. These headwinds continue to weigh on relative performance," ANZ adds.

• EUR/USD hit 1.1676 overnight, sellers emerged and the pair turned lower

• Sharp gains in US yields , rates weighed on the pair

• US interest rate gains drove USD broadly higher; UDS/CNH rallied above 6.8140

• Wider US-German 2-year spread contributed to EUR/USD's fall

• Drops in gold , silver & stocks added to the USD dollar's bid

• EUR/USD hit a 1-1/2-month low of 1.1617 then bounced slightly

• Some early NY USD selling lifted EUR/USD towards 1.1645, pair traded down -0.21%

• Falling RSIs, move below 55-DMA, monthly inverted hammer are bearish tech signs
eurusd


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

• AUD/USD hit 0.7223 overnight, sellers emerged, the pair then fell sharply

• Big gains in US yields drove broad-based USD buying

• Risk assets sold on USD bid; gold, silver, copper & equities see big drops

• USD/CNH's rally above 6.8140 added to the risk-off sentiment

• AUD/USD fell below the 10- & 21-DMAs, hit an 8-session low of 0.7140

• The pair bounced into NY's open but still traded down -0.70% in early action

• Techs flash warnings to bulls; pair below 10- $ 21-DMAs, RSIs are falling

• A monthly inverted hammer is now in place for May, adds to bear signals
audusd


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

• USD/JPY weekly chart showing a doji/hammer into a bullish engulfing candle

• The candle signals supporting a more constructive look to USD/JPY

• Broad based dollar gains, broad based yield gains and fresh geopolitical concerns

• A toxic mix for the yen and the market appears happy to take the currency lower

• USD/JPY up to 158.67 (EBS) likely deep in rate checking territory: Thurs pullback cited

• Look for heightened market sensitivity/MOF presence on the approach to 159.00

• A huge $5 bln option strike at 159.00 expires at 10 a.m. New York time on Mon May 18
USD/JPY weekly chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• EUR/USD risk reversals increasingly favour EUR puts over calls as USD gains broad support

• Benchmark 1-month 25-delta risk reversal at 0.45 — highest since April 13, up from 0.25 last week

• Rising risk reversals signal options market expects implied vol to climb as EUR/USD drifts lower

• That's exactly what's happening — 1-month implied vol at 5.75, up from 2026 lows of 5.35 on Thursday

• But context matters - March saw 1-month vol peak 9.0 and 1-month risk reversal reach 1.5

• Current moves signal caution, not panic — EUR/USD remains well within its longer-term ranges
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility


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

• Gold drops from $4665/oz to $4555/oz on Friday

• Follows sell signal where 55-DMA fell below 100-DMA

• USD index rises to 99.20 - highest since Apr 7

• USD index back above 55-DMA at 98.97

• 21-DMA set to rises over 100/200-DMAs - buy signal

• Apr-7-8 gap (99.52-98.92) may be filled

• EUR/USD sinks to 5-week low

• *

Gold


USD index


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

• Cable falls to 1.3335 as news of Burnham's path to Downing Street weighs on pound

• Burnham set to stand in Makerfield by-election, mooted for June

• If Burnham wins, he is expected to launch leadership challenge against PM Starmer

• July mooted as earliest month in which Burnham could replace Starmer as PM

• 1.3335 is the lowest level since April 8; dollar benefits from higher UST yields

• Six of 10 fund managers polled by FT said Burnham is "least market friendly" PM option

GBPUSD


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

• EUR/USD sinks to 1.1632 EBS its lowest since April 8

• Pair drops below 55-DMA at 1.1646

• Challenging midway point of Mar-Apr range at 1.1629

• Apr 8 low was 1.1589 and 61.8% Mar-Apr range is 1.1577

• This week's series of lower daily highs may encourage sellers

• Traders are long euro and oil has risen back to $108/pb

•
EURUSD


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

• USD/JPY holding bid in Asia as is wont pre-weekends, range 158.33-59 EBS

• Tentative moves higher but market still wary of MOF-ordered intervention

• MOF-speak conspicuous in its absence today, preparing for surprise move?

• No doubt MOF out to punish speculators, that said, real USD demand too

• Maybe less so today however with Nikkei off, less hedging interest

• Nikkei from 63,235 early high to 61,740 at TSE AM close

• But Japanese importer interest strong, 15th and pre-weekend Gotobi demand

• Technically, USD/JPY towards top of 156.37-158.92 daily Ichimoku cloud

• 100-DMA in cloud at 157.43, still pivot?

• In options, massive $1.6 bln expiries today between 158.00-20, supportive

• EUR/JPY on back-foot, 184.58-82 EBS, tracking away from 185.41 peak Tuesday

• CHF/JPY in stasis within 201.23-202.28 range since Tuesday, 201.64-202.12

• GBP/JPY heavy, 211.72-212.33, dipping into 211.08-212.06 daily Ichi cloud

• AUD/JPY backing off its 114.73 high Wednesday, Asia 114.39 to 113.86

• Japan wholesale prices surged in April, seen cementing BOJ June hike

• Latest poll shows Japan Q1 GDP likely rose 0.4% on exports

• Related comments , , also

• On Japan CGPI , for more click on [FXBUZ]

USD/JPY hourly:


Nikkei 225 hourly:

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

• EUR/USD heavy, 1.1676 early to 1.1646, in line with broad USD strength

• Deeper into its tapering, 1.1584-1.1703 daily Ichimoku cloud

• Selling from 1.1721 yesterday, hourly Ichi tenkan/kijun 1.1662/83 above

• Market may be capped today at 1.1675 on massive E1.3 bln option expiries

• More above too between 1.1740-90 total E2 bln

• Below E1.2 bln 1.1620-50 and likely supportive for now

• EUR/JPY on back-foot, 184.58-82 EBS, tracking away from 185.41 peak Tuesday

• EUR/CHF heavy, 0.9146-50 EBS, deeper into its 0.9123-68 daily Ichimoku cloud

• EUR/GBP bid and exception on UK political to-do, 0.8709-13

• Popped above its daily Ichimoku cloud yesterday, today 0.8694-0.8701, thin

• Smattering of option expiries today at 0.8650, 0.8675, 0.8700 and 0.8720

• Related comments , , ,

• And , also , for more click on [FXBUZ]

EUR/USD:


EUR/JPY:


EUR/GBP:

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

• AUD/USD -0.2% Fri as broad USD index breaks above 98.97 55-DMA in Asia

• AUD vulnerable to downside extension post-failure to break 0.7283 resistance

• U.S. inflation concerns continue to escalate; Xi warns Trump on Taiwan

• RBA's Hunter speaks Tue ahead May meeting minutes release, AU Apr jobs Thur

• U.S. initial jobless claims 211k (poll 205k), Apr retail sales +0.5%

• Range Asia 0.7201-23, support 0.7100 0.6834, resistance 0.7283 0.7661
AUD Daily 55-DMA


DXY Daily 55-DMA

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

• USD/JPY traded through anticipated line in sand of 158 for FX intervention

• Up to 158.41 EBS, Asia so far today 158.32-44 and consolidating gains

• Tokyo still wary of FX action, especially ahead of the weekend

• Good Japanese importer demand eyed, today pre-weekend Gotobi

• Specs also seen to have joined rally, hedgers too on Japanese equity buys

• USD/JPY towards top of 156.37-158.91 daily Ichimoku cloud, 100-DMA 157.43

• Widening of JGB-US Treasury 2-year rate differentials look to have peaked

• Off from 259.7 bps Wed to 256.10 bps yesterday, in 10s narrower to 183 bps

• On options front $1.6 bln in expiries today between 158.00-20 strikes

• These expiries likely supportive for now, also USD usually bid pre-weekends

• Related comments , , ,

• And , also , on US data

• US markets , , ,

• Fed-speak , , ,

• And , , for more click on [FXBUZ]

USD/JPY:

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

• NZD/USD -0.9% wtd amid darkening domestic & international economic clouds

• NZ Apr manufacturing PMI 50.5 (prior 53.2), 4th-consecutive decline post-Dec

• DXY firms as U.S. inflation concerns mount; Xi warns Trump on Taiwan

• NZD close below 0.5929 opens downside potential towards 0.5815 support

• NZ Q1 producer prices due Tue, an important read ahead May RBNZ meeting

• Range NZ 0.59075-17, support 0.5815 0.5680, resistance 0.6090-95 0.6120
NZD Daily 55-DMA


DXY Daily 55-DMA

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

• AUD/USD -0.6% from Thur 0.72643 high as broad USD index strengthens

• DXY +1.1% wtd, largely driven by escalating U.S. inflation concerns

• Reports indicate U.S./CN meeting focussed on trade and geopolitical issues

• Xi warns Trump Taiwan disagreements could push relations to dangerous place

• AUD shies away from 0.7283 resistance, vulnerable to further drift lower

• RBA's Hunter speaks Tue ahead May meeting minutes release, AU Apr jobs Thur

• U.S. initial jobless claims 211k (poll 205k), Apr retail sales +0.5%

• Overnight range 0.7217-61, support 0.7100 0.6834, 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.)

Goldman Sachs Research preview the core PCE print for April which is due on May 28.

"With CPI and PPI in hand, we estimate that core PCE prices rose 0.30% in April. Our forecast implies that core PCE prices rose 3.32% year-over-year and headline PCE prices rose 0.45% in April and 3.79% year-over-year.  We estimate that trimmed mean PCE inflation was a softer 0.25% because it removes boosts from the energy price spike, tariffs, and AI mismeasurement," GS notes.

"Core CPI rose 0.38% in April, reflecting a roughly 13bp boost from an extra month’s worth of rent and owners’ equivalent rent inflation to make up for a missing month from the government shutdown last October.  Lodging, airfares, and household operations each contributed 4bp," GS adds.

• GBP$ soft in NY afternoon trading, -0.9% at 1.3400; NorAm range 1.3518-1.3399

• Labour party resignations fomenting political unrest as Starmer tenure tenuous

• Mideast tension, high oil, inflation/growth function add to UK fiscal concerns

• Today's UK gilt price action hints at diminishing fiscal angst, long yields remain elevated

• UK CPI/RPI/PPI next week may be seminal moment as inflation likely ticked higher

• GBP$ supt 1.3399 Thurs low, 1.3383 daily low April 13, 1.3322 daily cloud base

• Res 1.3483 100-DMA (fmr supt), 1.3536 Thursday high, 1.3553 falling 10-DMA

Chart:


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

• NY opened near 1.1700 after 1.1722 traded overnight, slide extended in NY

• USD buys, firmer yields , wider spreads

weighed

• Those moves ensued after April retail sales, weekly jobless claims reports

• Gold and silver turned lower and USD/CNH rallied off its session low

• EUR/USD fell below the 200-DMA & May 5 daily low, the pair traded 1.1671

• 10-session low hit, pair then bounced slightly, neared 1.1675, was down -0.31% late

• Techs lean bearish; RSIs falling, 15-mo Bollis contracting, monthly inverted hammer in place
eurusd


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

• NY opened near 0.7240 after 0.7264 traded overnight, down move extended in NY

• US yields firmed after April retail sales, weekly jobless claims reports

• Overnight USD buying intensified while gold, silver prices moved downward

• USD/CNH rallied off its 6.7817 low and neared flat on the session

• AUD/USD dipped below the 10-DMA, traded 0.7217 before bouncing slightly

• Pair lifted back above the 10-DMA, sat near 0.7225 late, was down -0.45%

• Techs lean bullish; monthly RSI rising, pair is consolidating gains off the April 29 low

• Hold above the 61.8% Fib of 0.8007-0.5910, widening Bolli bands are bull signals
audusd


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