• Risk reversal options are a volatility trade which take advantage of a currency pairs direction

• EUR/USD risk reversals have been increasing volatility risk premiums for EUR puts over calls

• That's the right to sell EUR/USD versus buy it- prices have taken another leg higher Monday

• Benchmark 1-month 25 delta contract reached 1.7 Monday - a new high since October 2022

• That's up from a small topside strike premium in late Feb before Mid East conflict began

• 3-month 25 delta risk reversals now above 1.0 EUR puts - their highest in a year

• 1-year 25d risk reversal loses topside strike premium - now 0.1 EUR puts - last seen Apr 2025

• Related - Fear trade takes FX option costs toward year long highs
EUR/USD 25 delta risk reversals


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

• Traders have only unwound $7 billion of the $27 billion wager on euro rising

• EUR/USD has dropped 1.2084 to 1.1507 while bullish bets pared

• The remaining $20 billion is by far the largest existing FXwager

• Risk aversion evident due Iran war, bigger fall likely while more bets pared

• Target to correct EUR/USD's 1.0125-1.2084 rise is 1.1336

•
EURUSD and betting


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

• Redcastle Resources jumps as much as 15.6% to A$0.185; marks steepest intraday pct gain since February 11

• Stock hits highest since February 24

• Diversified miner reports multiple thick, high-grade gold intercepts at Redcastle Reef deposit in co's Redcastle project area in Victoria

• Says drilling results provide "high level of confidence" in geological model, continuity of mineralisation across planned mining area

• YTD, RC1 soars 77.1%

(Reporting by Nikita Maria Jino in Bengaluru)

• USD bid across the board with USD/JPY in the lead, Asia 157.81 to 158.90 EBS

• Escalation in Middle East conflict, possible prolongation behind rise

• Japan very dependent on Middle East energy imports, US not so much

• USD/JPY may be heading for test of 159.23 peak January 23, 159.45 January 14

• Maybe even 161.96 July 3, 2024 though intervention probably likely before

• Large option expiries to downside today supportive 157.25-158.05 $3.2 bln

• Japanese official-speak conspicuous in its absence today

• Nikkei down over 7%, JGB yields jump on inflation fears, markets in turmoil

• Tokyo pundits see possible stagflation ahead despite good data so far

• Japan wages up in Jan, large hikes eyed in Apr, Feb loans continued to rise

• EUR/JPY tad lower but steady in 182.43-80 EBS range, above 181.84 100-DMA

• GBP/JPY 210.48-211.60, still ensconced in 209.53-212.20 daily Ichimoku cloud

• CHF/JPY buoyant but sub-203.99 record high March 2, Asia today 202.37-203.53

• AUD/JPY sideways on higher plane, 110.18-111.12, recent high March 3 112.09

• Related , , on Japan data
USD/JPY hourly:


Nikkei 225:


Yield on JGB 10s - hourly:

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

• GBP/USD down 0.8 in Asia as the safe-haven dollar rallies broadly

• Opens at 1.3364 from 1.3425 NYK close, trades a 1.3283-1.3377 range

• Risk aversion grips markets; crude oil surges 28% on US-Israeli war on Iran

• Wall Street futures, Asia stocks slide; risk-sensitive GBP hit hard

• Trump calls for Iran’s "unconditional surrender"

• Iran defies Trump, picks Khamenei's son, a hardliner, as successor

• Threat of global recession, energy price shock will continue to weigh on GBP

• Support at 1.3255, Mar 3 low followed by 1.3213, 76.4% Fibo of Nov-Jan rally

• Resistance 1.3350-55, 1.3375-80
GBP:

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

• GBP/USD -0.8% in volatile Asia as traders scramble for safety of USD

• Gaps down to 1.3364 at the open from NYK's 1.3425 close; hits low of 1.3298

• Risk aversion grips markets; crude oil surges 20% on Middle East conflict

• Trump calls for Iran’s "unconditional surrender" as war rages

• Iran defies Trump, picks Khamenei's son, a hardliner, as successor

• Threat of global recession, energy price shock will continue to weigh on GBP

• Strong supports at 1.3295-1.3300, break opens test of 1.3255, low on March 3

• Resistance 1.3350-55, 1.3375-80; Fri range 1.3313-1.3425
GBP:

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

• Australian gold stocks fall as much as 4%, their lowest level since February 9

• Sub-index slumps tracking broader gold prices which fall 2%

• Northern Star Resources fall as much as 4.1% and Evolution Mining sheds 4.4%

• Sub-index has risen 1.1% this year, including session moves
(Reporting by Roshan Thomas in Bengaluru)

• NZD/USD -0.6% Mon as weekend Iran war news triggers safe haven DXY demand

• NZD consolidating below 0.5876 200-DMA, downside extension likely

• Oil spike detrimental to NZ economy heavily reliant on refined fuel imports

• Qatar's Energy Minister Saad al-Kaabi says oil could reach $150 a barrel

• U.S. Feb non-farm payrolls -92k (poll +59k), stokes FFR uncertainty

• Range NZ 0.5854-78, support 0.5580, resistance 0.6012 0.6076 0.6092
NZD Daily 200-DMA

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

• EUR/USD -0.5% from Fri close as DXY buyers emerge in early trading Mon

• Broad USD index up 0.5% as weekend Iran war news prompts safe haven buying

• Oil prices spike as production cutbacks mount amongst Gulf States

• Qatar's Energy Minister Saad al-Kaabi says oil could reach $150 a barrel

• U.S. Feb non-farm payrolls -92k (poll +59k), stokes FFR uncertainty

• Short term EUR support near Tue 1.1530 low, but remains pressured overall

• Fri's break below 1.1574 52-WMA a very bearish signal

• EU Jan industrial production data due Fri, Reuters poll consensus +0.5% m/m

• Range Asia 1.1546-98, support 1.1490 1.1470 1.1392, resistance 1.2084
EUR Daily 55-DMA


EUR Weekly 52-WMA

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

• AUD/USD -0.7% in early trading Mon as impacts from U.S.-Iran war solidify

• Oil sharply higher as storage capacity limits trigger production cutbacks

• Qatar's Energy Minister Saad al-Kaabi says oil could reach $150 a barrel

• U.S. Feb non-farm payrolls dissappoint, -92k versus poll consensus +59k

• RBA's Hauser says any change to USD safe haven status will be glacial

• AUD under pressure short term, solid support 0.6895-0.6945 should hold

• Range early Asia 0.6982-0.7005, support 0.6944 0.6900, resistance 0.7158
AUD Daily 200-DMA & DXY Daily 55-DMA

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

• AUD (+0.3%) broadly consolidates as intra-day ranges tighten. Range: 0.6977-0.7047

• Payrolls miss provides brief respite for AUD/USD. Middle East conflict is still the focus

• 200-hour MAs at 0.7050-70 keep a lid on rebounds

• Sellers will continue to keep the weekly low at 0.6945 in sight

• That said, near-term support at 0.6980-0.7000 holds firm for now

• Going forward, geo tensions should drive the action
AUDUSD hourly chart


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

Goldman Sachs Research raised its Oil and USD/JPY forecasts earlier this week.

"Raised our 2Q26/4Q26/2027 Brent crude oil price forecasts to $76/$66/$70/bbl (from $66/$60/$65/bbl) and our average 2Q26 European (TTF) natural gas price forecast to €45/MWh (from €36/MWh) to reflect energy disruptions related to the ongoing conflict with Iran," GS notes.

"Raised our 3/6/12m USD/JPY forecasts to 160/158/155 (from 157/155/152) to reflect further depreciation pressure following the landslide LDP victory," GS adds.

• GBP$ firm in NY afternoon trading +0.22% at 1.3390; NorAm range 1.3408-1.3313

• Mideast tensions remain primary focus of markets, oil surging on supply uncertainty

• Pair whipsawed after US payrolls downside surprise; US yields ultimately lower post-data

• UK-side sees gilt yields move higher still; SONIA futs pricing diminshing odds for BoE cuts

• LSEG's IRPR indicating no BoE cuts in 2026; cut odds peak in summer near 40%; YE -9bp

• GBP$ res 1.3408 Friday high, 1.3445 flat 200-DMA, 1.3561- 50% Fib of 1.3867-1.3255

• Supt at multiple HMAs in low 1.3350's, 1.3298 daily low Mar 5, 1.3180 Dec 2 daily low

GBP Chart:


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

Bank of America Global Research previews next week's US February CPI report.

"The February CPI report should continue to show that inflation remains relatively contained. We expect headline and core CPI to increase by 0.27% m/m (2.4% y/y) and 0.26% m/m (2.5% y/y), respectively. That is unlikely to tilt the scales for the Fed in either direction when it comes to its next policy move. Meanwhile, we expect the headline NSA index to print at 326.877," BofA notes.

"Fed implication risks are likely more important than print Based on our CPI forecast, we project that core PCE will increase by 0.22% m/m in February, which would follow a projected 0.43% m/m increase in Jan and leave y/y inflation at 2.9%. While this would be a decline from 3.1% y/y in Jan, we do not think it would change the current Fed rhetoric, especially with the risks posed by the Iran conflict," BofA adds.

• AUD/USD bounce on -92k payrolls was a dead cat - bid proved fleeting

• Geo risk is still the key driver keeping risk appetite on the backfoot

• Kuwait cutting production adds to oil supply concerns. Brent through $90/bbl

• Weekly lows at 0.6945 now squarely in focus - clean break opens up 0.6900

• Risks still skewed towards fading bounces. Resistance at 0.7090-0.7114

• No signs of de-escalation will keep AUD/USD trading heavy
audusd vs spx


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

CIBC Research reviews today's US February jobs report.

"The US labor market deteriorated sharply in February, with employers shedding 92K jobs, compounding negative revisions to the prior two month job count that totaled -69K. That resulted in the unemployment rate ticking up to 4.4%. That compared to the consensus expectation for a 55K gain in jobs and for the unemployment rate to remain steady at 4.3%. Job losses were relatively widespread across industries, with leisure/hospitality (-27K), health/social assistance (-19K), and manufacturing (-12K) seeing the biggest drops," CIBC notes.

"Overall this still keeps intact our call for the Fed to cut rates, but the oil price shock could potentially delay the timing if the war doesn't end in the coming weeks," CIBC adds.

ANZ Research maintains a bearish bias on EUR/USD in the near-term.

"EUR/USD was among the weaker performers in the G10 this week, falling to 1.1530 on 3 March, its lowest level in nearly three months. The move was not entirely surprising, as options markets had begun pricing protection against EUR weakness earlier in the week, reflecting rising geopolitical uncertainty. 

Historically, such dynamics have weighed on EUR. During the Russia–Ukraine conflict in 2022, a stagflationary mix of weaker activity and renewed price pressures contributed to EUR/USD declining toward parity. While a repeat of that extreme scenario appears unlikely at this stage, uncertainty around the duration of the current conflict is keeping markets cautious. In the near term, geopolitical developments and energy price dynamics are likely to remain the dominant drivers for EUR," ANZ notes.

"We expect EUR/USD to remain under pressure, with 1.15 (21 Nov 25 low) as immediate support and next support at 1.14 (July 25 low), while 1.167 (200 DMA) should act as resistance on upside,' ANZ adds.

• $CAD a tad soft into NorAm, -0.12% at 1.3654; Friday range 1.3687-1.3647

• CAD firms w/oil, gold strength as other majors weaken on expanding Mideast tumult

• US payroll data 8.30AM NYT in focus for clues at Fed policy path; Fed cut odds waning

• LSEG's IRPR indicates Fed cut in Jun/July, -38bp for 2026; BoC seen hiking in Q4 2026

• Despite conflict-related volatility $CAD relavely steady w/offers above 1.37 intact

• $CAD res 1.3687 Fri high, 1.3706 bruised 50% Fib of 1.3929-1.3482, 1.3753 Mar 3 high

• Supt 1.3618 daily conversion line, 1.3563 lower 21-d Bolli, 1.3506 daily low Feb 11

$CAD Chart:


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

March 6 (Reuters) - Price action in FX options shows a market growing increasingly concerned about a deeper EUR/USD drop.

Traders have been buying EUR put options that give them the right to sell EUR/USD at fixed strikes in the future, with those strikes running from 1.1500 down to 1.1200 and beyond, across expiries in the coming weeks and months. These puts allow long EUR/USD positions to be hedged, while volatility traders stand to benefit from any spike in implied volatility that would accompany a sharp EUR/USD drop.

Risk reversals are an option used to capture volatility in a particular direction - charging an implied volatility premium for strikes in the direction deemed most likely to increase it. EUR/USD risk reversals have spiked significantly higher for EUR puts over calls this week - the benchmark one-month 25 delta reaching its highest downside over upside strike premium since June 2024 at 1.1. If EUR/USD doesn't fall further, buyers of these options lose only the upfront premium. But the jump in costs and demand shows traders are clearly concerned with the growing EUR risks tied to the Middle East conflict and its impact on energy prices and inflation.

Related - U.S. jobs a sideshow to Iran headline risk - options show
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility


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

• AUD (-0.02%) hovers near 0.70, geo tensions continue to drive sentiment

• Topside capped at the 0.7060-71 zone (200HMAs) - rebounds faded

• While U.S. payrolls is the scheduled event risk. Data has broadly taken a backseat

• But a firm beat would likely spark another leg lower in AUD/USD

• Clean break below 0.70 would open up the weekly low at 0.6945

• That said, AUD continues to perform on the crosses. AUD/NZD back above 1.19
AUDUSD hourly


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

• Geopolitics remains the key driver which keeps GBP risks leaning lower

• Oil prices continue to linger near recent highs

• With no signs of de-escalation, recent trends should extend into the weekend

• GBP/USD range tight (1.3322/79) but a move to weekly low (1.3255) cannot be ruled out

• Below there and the door will likely open up for a move to 1.30

• Near-term resistance comes in at 1.3400 and 1.3444 (200DMA)
GBPUSD


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

• Traders were betting over $23 billion before U.S. attacked Iran

• EUR/USD sank 1.1796-1.1530 after the attack

• The conflict continues and EUR/USD set to end the week around 1.16

• There are more profits to book and cause to bank them

• Techs more bearish after sustained drop below 200-DMA at 1.1674

• Profit-taking may continue to determine the direction of currencies

•
EURUSD


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

March 6 (Reuters) -

• EUR/USD FX option risk reversals reach 1.05 EUR puts over calls on Friday

• Exceeds Tues 0.8 peak - highest downside over upside premium since June 2024

• Comes amid ongoing demand for downside strikes as low as 1.1200

• Options market clearly wary of more EUR/USD weakness and needs to hedge the risk

• EUR/USD implied volatility edging back toward Tuesday's highs - 1-month 7.15

• Related - Option risk reversals - FX indicators and cash generators

• Related - FX options wrap - Calm on the surface, but smouldering risks
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility

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

• USD/JPY bid into the Tokyo for the day and week, 157.38 early to 157.91 EBS

• Holding close to the 157.95-97 double top February 9, March 3

• Stops eyed on 158.00 break but upside seen limited on FX action concerns

• USD/JPY tracking away from 156.94-157.21 hourly Ichimoku cloud

• Tenkan 157.64 ahead, kijun too at 157.41, ascending 100-HMA 157.36 now

• Trading mostly light in Asia ahead of the weekend, US jobs report tonight

• Nikkei closed up 0.6% at 55,620.84, JGB yields firmed on inflation concerns

• Little new from FinMin Katayama, BOJ Himino in Diet testimony

• Related comment , on BOJ , also

• On Katayama/Himino-speak , , US jobs
USD/JPY hourly:

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