• Cable hits 1.3184 after tripping stops sub-1.3220 (March 13 low) and 1.3200

• 1.3184 is the lowest level since Dec 2 (1.3180 was the low that day)

• Middle East war escalation concerns inflate safe-haven dollar

• Iran calls U.S. peace proposals "unrealistic" (April 6 is a Trump deadline)

• GBP/USD bear targets include 1.31 and 1.3011 (November low)

• On the horns of a growth-inflation dilemma, Powell to speak at Harvard

GBPUSD


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

ANZ Research discusses USD/JPY outlook on rising oil prices.

"USD/JPY has traded within the 158–160 range, and ongoing high oil prices suggest continued upward movement. In the short term, key resistance is near 162, which would see more verbal intervention from authorities. We think the bar is higher in terms of USD/JPY levels for intervention because the shift higher is a function of a negative terms of trade shock rather than speculative flows. Further, previous episodes of intervention have been unsuccessful over the medium term, as market forces will likely weaken the JPY in an environment of higher oil prices," ANZ notes.

"According to our analysis, if oil prices rise to the 120–150 range, the pair may test levels of 164. Conversely, should oil prices decline to 80–90, the pair may revert near 156," ANZ adds.

• EUR/CHF met fresh headwind at 0.92 after early Europe gain

• Offers at 0.92 also capped pre-weekend rise

• 0.92 is the highest level since Feb 2 (0.9217 was EBS high that day)

• EUR/CHF supported by risk of SNB FX intervention (selling francs)

• Swiss March inflation data is due on Thursday (at 0630 GMT)

• CPI forecast at 0.5% YY (Reuters poll) vs 0.1% in January and February

EURCHF


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

Bank of America Global Research adopts a bullish USD bias in Q2 across the board. BofA targets EUR/USD at 1.14 and USD/JPY at 160 in Q2

"We have crystalized our bullish USD narrative of recent weeks into our 2Q forecasts, now looking for dollar appreciation against most currencies. Any near-term resolution to the Middle East conflict will likely be overwhelmed by medium-term disruption to energy supply, which in turn likely pushes back growth convergence for the rest of the world to 2H, at the earliest," BofA notes.

"A weekly close of the DXY dollar index above 100.36 would add to bullish risks. Our recommended USD longs are vs. NZD - the only G10 commodity currency that is an energy importer - and GBP, which has been surprisingly resilient to the back up in rates," BofA adds.

Credit Agricole CIB Research discusses AUD and CAD Q2 outlook and targets AUD/USD at 0.73 and USD/CAD at 1.39 by end of Q2.

"We continue to forecast AUD/USD to peak in Q226 at 0.73 before coming back lower as other central banks catch up with the hawkish RBA. Our positive 2027 AUD/USD outlook remains intact given supportive energy price outlook," CACAIB notes.

"We are less constructive on the CAD in the near term, given persistent risks related to the upcoming USMCA renegotiation and the relatively more dovish BoC policy outlook. We are more constructive in the long term," CACIB adds. 

• U.S.-listed shares of gold miners up premarket, tracking rise in bullion prices [GOL/]

• Spot gold up 0.8% at $4,531.56 per ounce at 1046 GMT, after gaining more than 1% earlier in the session

• Gold rises on bargain-hunting, but set for its largest monthly decline in nearly two decades as rising oil prices due to the escalating war in the Middle East nearly eliminate rate cut bets for the year

• Top miners Newmont up 1.1%, while Barrick Mining , rises marginally

• South African miners Gold Fields and Harmony Gold

up 1.5% each; AngloGold Ashanti rises ~1%,

• Canadian miners Agnico Eagle Mines , and Kinross Gold , up marginally and 1.4%, respectively

(Reporting by Pooja Menon in Bengaluru)

USD/JPY has hit fresh two-year highs at 160.47, reigniting fears of Japanese intervention - and with it, a compelling case for owning JPY calls.

Verbal intervention from Japanese officials has already followed Monday's move, a familiar pattern at elevated USD/JPY levels. History shows that when rhetoric fails to cap the pair, the risk of direct currency intervention rises sharply - and when it comes, it comes fast. For those caught on the wrong side, the moves can be brutal.

JPY calls - options that give the holder the right, but not the obligation, to buy JPY at a pre-agreed rate - offer a smart way to hedge that risk. Should a sharp intervention-led drop in USD/JPY materialise, holders would be able to buy JPY at pre-selected, favourable levels regardless of where the spot rate has moved.

The options market is beginning to take notice. USD/JPY risk reversals - which measure the implied volatility premium of JPY calls over puts - have seen a gradual shift in favour of JPY calls on Monday. This is a market starting to price in intervention risk, even if it remains far from alarmed. Further gains in the risk reversal would signal growing demand for JPY call protection and a rising perception of intervention risk among options traders - a trend worth watching closely.

For hedgers and tactical traders alike, the asymmetry here is attractive. The cost of owning JPY calls remains relatively modest compared to the potential payoff if intervention triggers a sharp and sudden USD/JPY reversal. At these levels, the risk of doing nothing may well outweigh the cost of being protected.

With USD/JPY at two-year highs and officials already talking, the question now is how much more JPY weakness officials will tolerate - and whether you're positioned for a sudden USD/JPY drop.
USD/JPY 25 delta risk reversals

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

EUR/USD option markets are flashing a clear bearish signal - and for savvy bears and hedgers, that's actually an opportunity.

Risk reversal options can be a barometer of how the FX options market perceives risk and directional bias and in EUR/USD they are firmly in favour of the downside.

When they tilt sharply toward EUR puts over calls, as they have now, it signals that options traders are pricing in a significantly higher probability of downside moves than upside ones.

The 1-month 25-delta risk reversal - widely used as a benchmark for near-term sentiment - tells the story most clearly. Currently supported around 1.3 EUR puts over calls, it briefly traded a three-year high of 1.7 in early March and remains a stark contrast to late February, when the skew was 0.25 EUR calls over puts (upside over downside strikes).

For most market participants, this elevated put premium means paying up for downside protection. But for those who know where to look, the skew can work in your favour.

By attaching a reverse knock-out (RKO) trigger to a regular vanilla EUR put option, traders and hedgers can turn the high skew to their advantage.

The elevated probability of EUR/USD moving lower increases the likelihood of the RKO trigger being knocked out, generating a significant premium discount versus regular vanilla EUR put options. The result: cost-effective downside protection at a time when the market is pricing in maximum fear.

Such strategies are best suited to two types of participant.

First, those with a view for limited EUR/USD downside, placing the RKO trigger at a level they don't expect EUR/USD to reach. Second, those who anticipate deeper EUR/USD declines further out - after their option has already expired - and are therefore comfortable with the near-term exposure the structure provides.

Related - The EUR/USD downside hedge that remains a go-to favourite
EUR/USD 25 delta risk reversals

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

• AUD/USD holds below 0.69 after slide to 0.6843 in Asia

• 0.6843 is the lowest level since Jan 23 (0.6835 was the low that day)

• Asian stock losses hurt the risk-sensitive AUD: Nikkei closed down 2.8%

• Safe-haven USD benefits from higher oil prices. Australia to halve tax on fuel

• CFTC data: net AUD long rose to new nine-year high in week to March 24

• Westpac now expects RBA to raise rates in May, June and August

AUDUSD


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

• Cable has traded a 52 pip range thus far Monday; 1.3230-1.3282

• 1.3230 is two-week low (1.3226 was March 16 low; 1.3220 was March 13 low)

• Safe-haven USD buoyed by higher oil prices as Iran conflict escalates

• The U.S. is net energy exporter, while Britain is a net energy importer

• 1.3300 (former support point) is now a GBP/USD resistance level

• CFTC data: net GBP short fell 10% to 58,422 contracts in week to March 24

GBPUSD


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

• Risk aversion rising with stocks falling but EUR/USD supported

• Traders who were long of euros have pared bulk of their exposure

• EUR/USD remains well above the 2026 low at 1.1409

• While stocks weighed a further erosion of support seems likely

• Judged by euros resilience, extent of correction may be limited

• Target for a minor correction of 2025-26 rise at 1.1336

•
EURUSD and betting


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

• Soon-to-expire FX options can significantly influence price action when strikes are near spot

• Related hedging flows, used to neutralise currency exposure, can draw and pin spot to the strike level

• The larger the notional, the greater the hedging activity and the stronger the gravitational pull toward the strike

• 3-billion euros of 1.1495-1.1500 strikes expire Tuesday, followed by a massive 8-billion 1.1500-05 Wednesday

• Wednesday also contains 3.7 billion euros at 1.1450 and 3-billion euros at 1.1395-1.1400

• Related - Larger FX option strike expiries - Monday March 30

EUR/USD FX option strike expiries March 30 - April 3


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

• Lode Resources rises as much as 6.3% to A$0.17, highest since March 23

• Critical minerals explorer finds silver-antimony reserves at its Greater Montezuma Project in Australia

• Silver and antimony used in electronics, solar panels, semiconductors

• Despite moves, LDR down 19.1% YTD

(Reporting by Aamir Sheik Khalid in Bengaluru)

• GBP/USD -0.1% in Asia as Middle East conflict escalation weighs on risk

• WTI Crude +2.4%, S&P E-Mini -0.45%, Nikkei -4.7% as Houthis enter the war

• Pentagon preparing for weeks of ground operations in Iran- Washington Post

• Iran accuses the U.S. of duplicity, Pakistan prepares to host peace talks

• Trump says he wants Iran's oil, could seize Kharg Island, FT reports

• GBP stays resilient as hawkish BoE rate expectations support

• Strong support 1.3210-20. 1.3180, resistance 1.3270-80, 1.3320-30

• Friday range 1.3260-1.3345, Asia range 1.3230-1.3265
UK public's inflation expectations soar: Citi/YouGov survey:

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

• AUD/USD -0.3% Mon as sentiment remains downbeat on widening Middle East war

• Trump teases progress on peace deal despite preparations for ground assault

• Bab el-Mandeb Strait a fresh oil supply risk after Houthis attack Israel

• RBA meeting minutes Tue will provide increased clarity on current mindset

• AUD vulnerable to extended fall towards 0.6660 after breaking 0.6897 pivot

• Range Asia 0.6843-95, support 0.6660, resistance 0.7250 0.7282
AUD Daily 55-DMA

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

• Australian gold stocks rise 2.2% to 16,104.6 points

• Gold prices jumped ~3% on Friday on dip-buying after earlier pullback; remains subdued on Monday [GOL/]

• Stocks in the sector gain on dip-buying amid lingering Middle East tensions [MKTS/GLOB]

• Greatland Resources tops gains on sub-index, advancing more than 10%

• West Wits Mining , Beacon Minerals add more than 4% each

• Heavyweights Northern Star Resources , Westgold Resources gain 3.4% and 4.2%, respectively

• AXGD, however, has lost ~28% since Iran war began in late-February as stronger dollar, rising bond yields pressured bullion

• AXGD down 14.6% YTD

(Reporting by Roushni Nair in Bengaluru)

• USD/JPY broke through the 160.00 level Friday, remains bid

• Neither Japanese nor US monetary authorities spoke out against the move

• Conspicuous in their absence, sellers have pulled back

• USD bid across the board on likely escalation of Middle East conflict

• Pres Trump also rattles sabre against Cuba, more world conflict?

• Risk assets will likely be shunned at start of week, USD to remain bid

• USD/JPY 160.00-47 EBS so far in Asia, testing towards 161.00, 162.00?

• 161.96 peak on July 3, 2024, likely next target if no FX intervention

• Talk of some option barriers at 161.00 and especially at 162.00

• Stops above large? Japanese importer demand could spike again as result

• Middle East news, moves on energy market, FX action main foci today

• Related comments , , , also

• US markets , , ,

• On Middle East , , Cuba

• Fed-speak , on US economy
USD/JPY:

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

• NZD/USD -0.2% in Asia as traders assess weekend Iran war developments

• U.S. makes preparation for ground assault as Pakistan brokers peace talks

• Bab el-Mandeb Strait a fresh oil supply risk after Houthis attack Israel

• NZD post-Jan downtrend now well established, RBNZ meeting Apr 8 looming

• Major NZD support near 0.5710 at risk, break below will accelerate slide

• Range NZ 0.5730-60, support 0.5710 0.5580, resistance 0.5891 0.5918 0.6092
NZD Daily 200-DMA

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

• AUD/USD -0.1% early Mon amid escalating hostilities in the Middle East

• Yemen's Houthis attack Israel, the Bab el-Mandeb Strait a new risk

• Pentagon reportedly preparing for ground operations in Iran

• RBA meeting minutes Tue, futures now imply May OCR hike 70% probability

• Break below 0.6897 leaves AUD vulnerable to extended fall towards 0.6660

• Range Asia 0.6862-95, support 0.6660, resistance 0.7250 0.7282
AUD Daily 55-DMA

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

• USD net spec G10 long relatively steady in the Mar 18-24 period; $IDX -0.36% in period

• Data may be dated as the USD rose amid Mideast, inflation concerns after period cls

• US talks peace progress, Iran still lobbing missiles deny meanigful negotiations

• Global fiscal, inflation concerns rapidly becoming a thing as war drones on

• EUR$ +0.59%; spec -11.9k contracts now +9.3k; inflation/growth concerns for ECB

• $JPY -0.13%; specs +5k contracts now -62.8k; $JPY abv 160 in Friday trade

• GBP$ +0.41%; specs +7.1k contracts now -58.4k; GBP lwr amid fiscal, inflation angst

• $CAD +0.54%; specs -2.5k contracts now -1.6k; oil gold rise temper $CADs steady move higher

IMM Position Table:


Majors w/IMM performance:


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

• NY opened near 0.6890 after 0.6912 traded overnight, drop extended in NY

• Pair traded in choppy range in early action but sellers eventually emerged

• Concerns conflict with Iran could escalate drove risk-off sentiment, rallied US$

• Oil rallied more than 4.0%, USD/CNH rallied to 6.9223, stocks fell more than 1.5%

• AUD/USD fell below the daily cloud base, hit a 2-month low of 0.6865

• The pair sat near 0.6870 late in the session, traded down -0.31%

• Techs are bearish; RSIs indicate downward mometum, pair below 10, 21- & 55-DMAs

• Daily and monthly inverted hammer canlde reinforce the bearish signals
audusd


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

• GBP$ weakness extend in NY afternoon, -0.5% at 1.3266; Friday range 1.3345-1.3262

• Oil eyes $100/bbl (CLc1), key driver of USD bid, glbl inflation amid Mideast conflict

• UK 10-yr gilt yields highest since Jul 2008 exacerbates UK fiscal uncertainties

• LSEG's IRPR now indicating 72% odds for April BoE hike, +68bp by YE 2026

• Rising yields on back of rising UK prices, diminishing growth keeps GBP on backfoot

• GBP$ supt 1.3247 daily low March 19, 1.3220 trend low Mar 13, 1.3180 Dec 2 low

• Res 1.3312 21-HMA, 1.3345 Friday high, 1.3432 flat 200-DMA

GBP$ Chart:


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

Credit Agricole CIB Research maintains a bearish bias on EUR/USD in the near-term and through the rest of 2026.

"We maintain a modestly bearish outlook on EUR/USD from current levels given that some EUR positives (with respect to the ECB and European fiscal stimulus in particular) and many USD negatives (with respect to the US economic and Fed outlook) are still in the price. More recently, global geopolitical risks have clouded the outlook for the single currency," CACIB notes.

"We continue to think that the Eurozone and the EUR could remain vulnerable to further escalation of geopolitical tensions. We note that the ECB is sounding uncomfortable about further EUR/USD appreciation while political risks could resurface in the Eurozone, creating headwinds for the single currency. We continue to expect further EUR/USD weakness for the rest of 2026," CACIB adds.

• Shares of silver miners up, tracking rising prices of the metal [GOL/]

• Spot silver rises 4.4% to $71.10 per ounce

• Prices rise on dip-buying after a pullback earlier this week, while investors look for signs of de-escalation in the Middle East conflict

• Hecla Mining up 4.3%, Coeur Mining rises ~6%

• Canadian miners: Endeavour Silver gains 5.1%, Silvercorp Metals inches up 6.1%

• Abrdn Physical Silver Shares ETF and iShares Silver Trust ETF both advance 5.4%
(Reporting by Dharna Bafna in Bengaluru)