• EUR/USD FX option implied volatility remains close to multi year lows - consistent with low realised volatility

• However, gains in the 1-month contract reflect September 16 US Fed decision and seasonal return of FX volatility

• Risk reversals are a volatility strategy based on currency direction - they have held a EUR put over call strike premium since Feb

• However, benchmark 1-month expiry 25 delta risk reversals have almost erased that long standing downside strike premium

• A return to EUR calls over puts (topside) would suggest the FX options market is growing more wary of further EUR/USD spot gains

• Related - EUR/USD bulls face more hurdles
EUR/USD 25 delta risk reversals


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

• Cable has traded a 24.5 pip range thus far Monday; 1.3558 = intra-day high

• 1.3558 is three pips shy of Friday's three-month peak

• That peak was scaled after USD fell on unexpectedly negative U.S. retail sales data

• Balance of risk currently tilts towards Fed rate hold in September

• UK jobs, inflation data due this week; CPI is forecast to rise, to 2.9% (Reuters poll)

• Jamie Dimon warns UK finance minister Healey against higher bank taxes - FT

GBPUSD


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

• FX option strikes expire at 10am New York/14:00 GMT on Monday August 17

• EUR/USD: 1.1500 (2.3BLN), 1.1545-50 (473M), 1.1555-60 (304M), 1.1575-80 (382M), 1.1600 (512M)

• USD/CHF: 0.8095-0.8100 (226M)

• GBP/USD: 1.1315-20 (190M), 1.3540-50 (246M), 1.3565 (100M)

• AUD/USD: 0.7000 (440M), 0.7100 (563M), 0.7140-45 (634M), 0.7200 (360M)

• USD/CAD: 1.3850-55 (302M), 1.3970-80 (1BLN)

• USD/JPY: 158.00 (2.3BLN), 158.50 (455M), 159.00 (2.3BLN), 159.50 (701M)(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Shares of Australia's Sinclair Gold rise as much as 14.4% to A$1.350, marking their biggest intraday pct gain since April 8

• Gold explorer and developer signs binding earn-in agreement with Canada-based mineral exploration firm Medaro Mining Corporation for its Sala silver-zinc-lead project in Sweden

• Adds deal represents up to A$3.4 million ($2.41 million)in potential cash consideration, shares and Medaro-funded exploration expenditure

• Adds transaction converts earlier non-binding letter of intent announced in May into legally binding deal

• Co says it intends to use funds for exploration activities at its Mt Henry Gold Project in Western Australia, others

• About 220,065 shares change hands, about 1.7x the 30-day average

• Stock last down 10.6% with YTD losses of 27.5% ($1 = 1.4092 Australian dollars)

(Reporting by Subhalakshmi Dey in Bengaluru)

• Shares of Zijin Gold International climb 6.7% to HK$136, on track for biggest one-day pct gain since August 5

• Stock on course to snap two straight sessions of fall

• The gold and non-ferrous metal mining arm of Zijin Mining

says H1 net profit up 179% y/y at $1.45 billion, and revenue doubled to $3.99 billion

• YTD, Zijin Gold shares down 8.6%, Zijin Mining Shanghai shares down 3.5% and Hong Kong stock up 0.3%

(Reporting by Donny Kwok)

• AUD/USD +0.2% Mon, trading constrained but confidence in USD slipping

• Iran defiant with no peace prospects in sight as Trump continues rhetoric

• CN Jul house prices, industrial output, retail sales all due Mon

• AUD struggling to clear resistance near 0.7095, break above 0.7100 bullish

• U.S. Jul import prices & industrial production (poll +0.3% m/m) due Tue

• RBA Deputy Governor Andrew Hauser fireside chat in Brisbane Wed

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Range Asia 0.7081-95 support 0.6920 0.6866, resistance 0.7095-00 0.7200
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• Australian gold producers rise as much as 2.8%, marking their biggest intraday pct gain since August 10

• Gold prices inched higher in early Asian trade, supported by a softer dollar and recent economic data that curbed expectations of a U.S. interest rate hike next month [GOL/]

• Northern Star Resources rises 2%, while Evolution Mining climbs 1.5%

• YTD, sub-index down over 2%

(Reporting by Shruti Agarwal in Bengaluru)

• USD/JPY remains relatively bid despite USD weakness elsewhere

• Friday saw USD down across a broad front, USD/JPY off to 159.60 EBS too

• Some bounce since, 159.15-40 in Asia so far, high Friday 159.53

• Upside looks capped at 159.59 daily Ichimoku kijun, 100-DMA 159.99 above

• Base of 158.92-161.41 daily cloud pivot, underlining support 158.24 200-DMA

• Spot ensconced in 159.08-30 hourly Ichi cloud after break below Friday

• Bounce however from 200-HMA below then, 200-HMA now 158.66

• Option expiries today include 158.00 $2.3 bln, 158.25-95 $968 mln

• Also 159.00 $2.3 bln and $701 mln above at 159.50 strike

• JGB-US Tsy rate differentials narrower still, in 2s to @249, 10s @178 bps

• Narrower rate differentials finally having an impact?

• USD/JPY downside still limited but USD bulls getting antsy?

• Japanese importer bids still on dips but larger exporter sales pre-160?

• Tokyo likely more active this week with annual O-Bon holidays over

• Related comments , , also

• US markets , , ,

• On Middle East , US-China , Germany
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)

• NZD/USD +0.7% from Fri 0.58515 low after DXY & UST yields went into retreat

• U.S. Jul retail sales fell short of forecasts at -0.6% m/m (poll +0.1%)

• NZ Jul electronic card retail sales +1.3% m/m (prior -1.4%), +3.4% y/y

• Trump escalates Iran rhetoric, Iran remains defiant, no peace deal in sight

• U.S. Jul import prices & industrial production (poll +0.3% m/m) due Tue

• Futures pricing presently implies 86.2% chance of 25 bps RBNZ hike Sep 2

• NZD needs clean break above 0.5910 resistance to establish longer-term rally

• Range NZ 0.58885-92, support 0.5762 0.5627, resistance 0.5905-10 0.5990-95
NZD Daily 55-DMA


DXY Daily 55-DMA

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

• AUD/USD -0.2% from Fri 0.7095 high, but retains underlying bullish sentiment

• U.S. Jul retail sales -0.6% m/m (poll +0.1%), DXY & UST yields in retreat

• Trump tries to justify high fuel prices as an acceptable cost of Iran war

• Iran remains defiant, Strait of Hormuz remains effectively closed

• U.S. Jul import prices & industrial production (poll +0.3% m/m) due Tue

• RBA Deputy Governor Andrew Hauser fireside chat in Brisbane Wed

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Range Asia 0.7081-83 support 0.6920 0.6866, resistance 0.7095 0.7200
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

(Adds headline)

• EUR net spec short -60,010 contracts by Tuesday vs -58,091 previous week

• JPY net spec short to -42,085 from -45,473

• GBP net spec short -56,221 vs -57,814 the previous week

• AUD net spec short -39,223 vs -33,190

• MXN long 83,673 vs 76,543

• CHF short -32,462 vs -32,822

• NZD short -39,586 vs -41,203

• CAD short -173,362 vs -179,095(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7075 after 0.7056 traded overnight, rally extended early NY

• Downbeat US July retail sales sank the USD & US yields

• Gold, silver, copper rallied & USD/CNH fell towards 6.7400

• AUD/USD rallied above the 50% Fib of 0.7277-0.6867, hit 2-1/2-month high of 0.7095

• Then US dollar, yields, USD/CNH then moved upward & gold, silver eroded some gains

• AUD/USD neared 0.7080 late in the session, it traded up +0.28% in NY's afternoon

• Techs lean bullish; pair held above the 50% Fibo & the 10-, 21- & 55-DMAs

• Rising RSIs & August's monthly bull hammer reinforce bullish tech signals
audusd


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

JP Morgan Research discusses BoJ rate outlook and keeps targeting USD/JPY at 164 by year-end.

"Rate-hike expectations have increased not only at the front end but also further out the curve. However, this has not translated into yen appreciation; instead, the relationship between BoJ hike expectations and JPY has become a negative correlation," JPM notes.

"Our Japan economists have revised their forecast to reflect a somewhat faster tightening pace by the BoJ, expecting the policy rate to reach 2.00% by end- 2027. However: (1) a move to 2% is already largely priced in, and (2) the negative correlation between BoJ hike expectations and JPY is likely to persist for the time being. Therefore, we think that a faster BoJ hiking path will only have a limited impact on our medium- to long-term yen-weakness view. We keep our year-end USD/JPY target unchanged at 164," JPM adds.

• GBP$ firm in NY afternoon trading +0.30% at 1.3528; NorAm range 1.3561-1.3527

• Dollar was broadly offered after US retail sales confirms less-hawkish Fed policy path

• LSEG's IRPR indicating lower odds for Sept/Oct Fed hike, sees +23bp by Dec FOMC

• BoE looking a tad more hawkish, after post-Fed dovish shift; 63% odds for Nov hike

• Further out the front-end strips, Fed seen +33bp by Dec 2027, BoE +57bp; advantage GBP

• Next wk's UK jobs, CPI in focus for policy clues; soft prints may temper current ebullience

• GBP$ res 1.3561 Friday high, 1.3566 rising upper 30-d Bolli, 1.3658 the May 1 daily high

• Supt 1.3500 psychological lvl, 1.3475 daily low Aug 13, 1.3415 rising 200-DMA

Sterling Chart:


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

Goldman Sachs Research discusses yen's latest positioning.

"Japan's largest FX intervention in 15 years forced a sharp reduction in tactical Yen carry positions- even bigger than the initial unwind after the July 2024 operations. But the less Yen-positive macro backdrop likely in part explains why USD/JPY has already reversed nearly half of its initial decline," GS notes.

"Despite the significant drop in speculative positioning, more unwinds can follow if the right conditions align. Positioning could even flip net long if the macro and market backdrop argues for a stronger Yen, as it did in July-August 2024. Recession risk is much lower today than in the summer of 2024, and a bullish shift in JPY sentiment often requires the emergence of growth concerns.

But markets now view a September Bank of Japan hike as roughly 75% likely, and a faster pace of hikes could keep the Yen stronger for longer without a shift in the global growth backdrop," GS adds.

• Cable pushes through July’s 1.3556 high, tagging a fresh three-month peak at 1.3560

• USD under pressure after a soft US retail sales print (-0.6% vs +0.1% m/m)

• Data further reinforces case for Fed hold at the September meeting

• With sterling clearing the July resistance, 1.36 is the next near-term objective

• A decisive break here opens the door to a cluster of hurdles between 1.3658-1.3867

• Focus shifts to next week’s UK data deluge
GBPUSD daily chart


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

Bank of America Global Research discusses JPY outlook from the latest output of its quant models.

"More than a week has passed since the joint US-Japan FX intervention. So far, the operation appears relatively successful as, compared with previous episodes, investors have been reluctant to fade the rally. Indeed, the authorities' strong commitment and the high cost of failure have strengthened our bullish conviction on the JPY, and we recently revised our YE USDJPY forecast to 149 from 152," BofA notes.

"However, our quant signals raise some red flags for near-term JPY strength. Last week we saw an aggressive mean reversion in JPY skew, and option flow moved strongly in favor of JPY puts vs EUR and AUD, indicating that investors are moderating their worries on further upside. Additionally, our technical matrix has yet to trigger any positioning trend signals, while up/down vol and residual skew indicate that positioning and short-term sentiment are not yet supportive of the uptrend. Finally, our time-zone analysis indicates that JPY buying was not broad-based last week, with USDJPY finding consistent support during US trading hours," BofA adds.

• AUD/USD traded 0.7056-0.7078 overnight, NY opened near that high

• The pair traded up +0.22% in early NY on the back of broad-based USD selling

• USD sank despite firmer US yields and a drop in gold

• AUD/USD rallied back above the 50% Fib of 0.7277-0.6867

• Techs lean bullish; consolidation persists, RSIs rising, pair above 10-, 21- & 55-DMAs

• The monthly bull hammer candle for August reinforces the bullish tech signals

• US July retail sales, Aug. University of Michigan are data risks in NY's morning
audusd


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

• Range trading remains the dominant theme for AUD, with spot oscillating around the 100-day MA at 0.7058

• The 0.7075 area has been retested but continues to cap topside momentum for now

• A clean break above resistance would improve the technical picture, likely opens up a run for 0.7200

• Initial support is located at 0.7050, followed by the psychologically important 0.7000 level

• Low-vol backdrop supportive of carry demand, which should continue to underpin AUD vs low-yielding FX like CHF

• U.S. retail sales is the main near-term event risk, although the release is unlikely to materially alter the broader FX picture

• In turn, tight ranges and a lack of sustained directional momentum are likely to remain the prevailing conditions for AUD/USD
AUDUSD daily


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

• Yen's slide to weekly loss prompts bets for another intervention

• USD/JPY slips from 159.53 to 159.07 Friday, according to EBS data, but is stuck within the cloud

• The daily cloud currently spans the wide 158.92-161.42 region

• Spot has also been limited by 159.60, a 50% retrace of 163.99-155.20 intervention fueled slump

• The long tail on the Wednesday candlestick hints at gains in coming sessions

• However, beware USD/JPY and EUR/JPY usually struggles in August

Daily Chart


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

• Cable making another attempt to establish itself above 1.35, with the July high (1.3556) the next topside target

• A sustained hold above 1.35 would likely encourage fresh buying interest

• But price action remains subdued with GBP struggling to notably capitalise on tepid U.S. CPI/PPI data

• USD pullback may also lose momentum with Fed hike pricing appearing to find a floor around 25%

• This should make a clean topside break in Cable more difficult to achieve

• For now, spot appears likely to remain confined to its broader sideways range

• Ongoing lack of directional momentum continues to favour carry trades
GBPUSD hourly chart


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

• FX options expire at 10am New York/15:00 GMT on Friday August 14

• EUR/USD: 1.1425 (520M), 1.1450 (766M), 1.1475 (491M), 1.1490-95 (1.3B), 1.1500 (1.6B), 1.1540-45 (1.5B)

• EUR/USD: 1.1550 (1.4B), 1.1560-65 (427M), 1.1575-80 (660M), 1.1585-90 (684M), 1.1600 (746M), 1.1615-20 (459M)

• EUR/USD: 1.1635-40 (730M), 1.1650-55 (389M)

• USD/JPY: 155.00 (3.1B), 156.25 (200M), 156.55-60 (208M), 156.60-65 (209M), 157.95-158.00 (2.0B), 158.25-30 (413M)

• USD/JPY: 159.00 (360M), 159.35-40 (350M), 159.45-50 (645M), 159.55-60 (590M), 159.70-75 (250M), 160.00 (1.4B)

• USD/JPY: 160.60-65 (436M), 160.66 (397M), 161.90 (400M), 162.00 (223M), 163.00 (349M). EUR/JPY: 180.00 (200M)

• GBP/USD: 1.3300 (500M), 1.3320-25 (290M), 1.3400 (300M), 1.3435 (436M), 1.3500 (296M), 1.3510-15 (781M)

• GBP/USD: 1.3555-60 (434M), 1.3650 (220M), 1.3660 (410M), 1.3700 (219M). EUR/GBP: 0.8450-55 (339M), 0.8595-8600 (201M)

• USD/CHF: 0.8075-80 (204M), 0.8150-55 (779M), 0.8155-60 (1.0B)

• AUD/USD: 0.6800 (204M), 0.6900 (305M), 0.6960-65 (238M), 0.6970-75 (245M), 0.6985-90 (260M), 0.7000 (509M)

• AUD/USD: 0.7040 (254M), 0.7050 (303M), 0.7100 (671M)

• USD/CAD: 1.3250 (400M), 1.3915-20 (333M), 1.3940 (230M), 1.3975 (565M), 1.3990-95 (327M), 1.4000-05 (203M), 1.4035-40 (228M)

• USD/CAD: 1.4050 (370M), 1.4100 (1.4B), 1.4135-40 (207M), 1.4225-30 (879M), 1.4275 (230M), 1.5000 (527M)​

• USD/ZAR: 15.8000 (300M), 16.1920-2000 (210M), 16.2000-2500 (305M)
(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Traders who often follow techs are short of euros

• The 21-DMA is crossing above 55-DMA - bullish

• Shallow dip to 1.1512 from Aug high at 1.1580 - bullish

• EUR/USD yet to close above 100-DMA 1.1567

• Targets for a break: 1.1599, 1.1626, 1.1652

• FX calm may create two winners and two losers

•
EURUSD


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