By Justin McQueen

Apr 1 (Reuters) - Cable squeezed back up through 1.33, but this looks to be more short covering than a meaningful trend reversal. From here, further topside is likely to be harder to come by, with the 200-day MA and recent highs sitting at 1.3428-50, which will make it difficult to bulls for chase aggressively.

The equity rally – biggest 1-day rip since May – looks more emblematic of a bear market rally than a genuine all-clear. The Strait of Hormuz is still largely shut, and the prospect of U.S. ground troops in Iran ahead of the long weekend has not been taken off the table, which now, risk assets are not as well priced for. Eyes on U.S. President Donald Trump at 0100GMT, though his remarks that the Iranian President asked the U.S. for a ceasefire was met with a muted reaction, which is telling about the lack of appetite to chase in either direction. Unless there is something credible on the de-escalation front, there is a risk that the rally in equities loses steam.

Given GBP’s higher beta to risk assets, any rollover puts 1.32 back on the table in short order. On the domestic front, Bank of England Governor Andrew Bailey struck a relatively dovish tone compared with market pricing, saying that markets are getting ahead of themselves in pricing rate hikes – currently two by year-end -- though he kept the door open for a precautionary rate rise if needed.

The key takeaway for GBP is that Bailey comes across as a reluctant hiker, and history suggests a forced BoE hike – 2022 the most recent occasion – does not lead to a durable GBP bid. With the next meeting still a few weeks out and pricing having swung wildly over the past month, conviction here is low in either direction.
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GBP daily chart


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

JP Morgan is sidelined on EUR/USD around current levels.

'The euro out of the hole! The market clearly got a little short on the outlook plus in anticipation of further quarter end dollar demand, whilst didn't want to chase it lower you are probably not meant to chase it higher from these levels either," JPM notes

"Hard to say we are out of the woods but short covering continuing this morning, if you are bearish it is probably a fade on a 1.16 handle risking the 100 & 200 day moving averages (1.1678/1.1691)," JPM adds.

AUD/USD could face challenges in sustaining its recent rally, despite initial gains from improved risk sentiment. On Wednesday, the pair surged as traders reacted positively to the prospect of a resolution in the Iran conflict. However, this optimism may be tempered by external factors that could limit further upward movement. Recent comments from President Donald Trump suggested a rapid U.S. exit from Iran, which contributed to a decline in oil prices.

Nevertheless, even if tensions ease, energy prices may remain elevated due to the slow restoration of normal supply flows and a potential risk premium priced in for future energy shipments through the Strait of Hormuz.

This is particularly concerning for Australia, which relies on energy imports to support its economy. Higher energy costs could negatively impact Australia's economy which could hinder the Reserve Bank of Australia's ability to consider interest rate hikes, further dampening the AUD's prospects. Positioning could pose further limitations on AUD/USD.

According to the latest CFTC data, net-long positions on the Australian dollar are at their highest level in nine years. Traders holding long positions may be inclined to take profits if the pair rallies significantly, creating resistance at key levels.

Consequently, unless there is a substantial improvement in risk sentiment alongside a sharp decline in energy prices, AUD/USD may struggle to break above February's monthly high.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Nomura Research adopts a more bearish stance on CAD.

"We are becoming more bearish on CAD, despite higher oil prices boosting the terms of trade, as we think the FX market reaction could start to morph into either a more of a “risk off” framework (if tensions continue to grow and oil supply remains highly constrained) or a rates-driven world, if there are signs of geopolitical de-escalation. In both scenarios, CAD may underperform, having been somewhat in a “sweet spot” in recent weeks," Nomura notes.

"In the scenario of less oil price volatility and a return to a rates-driven framework, we think the Bank of Canada is unlikely to deliver the ~88bp of hikes currently priced by markets through end-2026, as domestic data show an economic slowdown since January, as confirmed by the Bank at its March policy meeting," Nomura adds.

Credit Agricole CIB Research discusses its updated USD/JPY outlook and targets.

"The BoJ remains a small driver of the JPY and the terms-of-trade shock and downside risks to growth generated by the Middle East crisis are stronger factors in driving the currency. Indeed, even if the BoJ raises rates further, it is likely to be out-hawked by other major central banks. Our US economist continues to expect the Fed to be on hold in 2026 and the market has moved towards this view faster than we anticipated due to higher oil prices,"CACIB notes.

"So, we are bringing forward our forecast peak in USD/JPY of 156 from H226 to Q226. We expect the exchange rate to decline in H226 to reach 154 by end-2026 as the BoJ resumes raising rates. We do not expect a return to the low prices before the Middle East crisis even if the war ends given the damage done to energy infrastructure during the conflict, so we are also pushing up our 2027 USD/JPY forecasts," CACIB adds

• Cable climbs to 1.3314 as risk-sensitive pound benefits from global stock gains

• 1.3314 is the highest level since March 27 (1.3345 was the high that day)

• U.S. stock futures positive after biggest one-day gains since May 2025 on Tuesday

• UK food inflation heading towards 10% due to Iran war, industry says

• UK factories see biggest month-on-month jump in costs since 1992, PMI shows

• Telegraph-Trump says U.S. strongly considering NATO exit. Starmer on EU

GBPUSD

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

• Spot gold up 1.1% at $4,721.49/ounce, its highest level since March 20

• Bullion prices rise supported by a weaker dollar following U.S. President Donald Trump's statement that the war with Iran could wind down in weeks

• Top miners Newmont and Barrick Mining gain 2.5% and 2.1% respectively

• South African miners: Gold Fields , AngloGold Ashanti and Harmony Gold up between 5% and 6.2%

• Canadian miners: Agnico Eagle Mines rises 2.7% and Kinross Gold up 2.8%

(Reporting by Sumit Saha in Bengaluru)

• USD/JPY lurches lower on mild de-escalation signals

• Popular positions squeezed as a result - SPX notched largest 1-day rise since May 12

• UST yields heading lower, thus USD/JPY follows

• Near-term support at 157.51 (Mar 19 low), 156.82/157.31 (55DMA cluster). Resistance: 160

• Trump to address nation on Iran at 0100GMT - limited appetite to fade moves ahead of that

• Note that this is still a headline-driven market, thus conviction will remain low
USDJPY vs 10s


USDJPY daily chart


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

• AUD/USD climbs to 0.6946 as global stock gains buoy risk-sensitive AUD

• Nikkei up 5%; Kospi up 8%; Europe's STOXX 600 up 2%. 0.6946 is high since March 26

• Stock gains fuelled by hope Iran war might end soon. Trump to speak at 0100 GMT

• AUD/USD resistance levels include 0.6957 (March 26 high) and 0.70

• 0.6900 is now a support point (0.6834 was nine-week low on Monday-Tuesday)

• Iran war is both a boost and a threat to Australia's LNG

AUDUSD


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

• USD/THB testing the 32.50 support once again

• Gold related selling and extended fall in DXY weighs

• Oil prices lower too, Brent crude nears $100 test, last $100.64/bbl

• USD/THB last at 31.51-53, traded 32.50-32.76 range so far

• DXY last at 99.59, off 99.88 early high in Asia
THB

(Catherine Tan is a Reuters market analyst. The views expressed are her own.)

• USD/JPY off hard with most Asian players done for the day

• Feeling is that Middle East and European players are behind the move

• USD/JPY from an early Asia low of 158.45 to 159.00 into the Tokyo fix

• Off since but remained mostly above the early low

• Late trading has USD/JPY now down to 158.33

• Towards the ascending daily Ichimoku kijun line at 157.91

• Daily lows of 158.30, 158.03, 157.62 too till trough of 157.51 Mar 19

• Related , for more click on [FXBUZ]

USD/JPY hourly:

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

• USD/THB pressured by selling from gold traders

• Pair last at 32.66-69, but doubt will break 32.50

• Rise in oil prices and inflation to add to hardship for the economy

• Thai economy hit by rising oil prices - Business group

• 2026 GDP growth forecast cut to 1.2%-1.6% from 1.6% to 2% earlier f/c

• 2026 inflation seen at 2%-3% vs 0.2%-0.7% seen earlier - Business group

• Tourist arrivals may fall by 1 million over the next 3 months - Biz group

• Govt plans relief measures, loan guarantee for oil fund amid energy crisis
THB

(Catherine Tan is a Reuters market analyst. The views expressed are her own.)

• GBP/USD up 0.1% in Asia on cautious optimism Iran conflict could end soon

• Trump says U.S. could end Iran war in two to three weeks

• Rubio says U.S. can see 'finish line', notes potential for direct meeting

• Follows media reports that Iran President was seeking to end the fighting

• But Hegseth's warning of escalation if Iran failed to make a deal caps rally

• Fresh Iranian threats against U.S. companies in region add to caution

• UK Govt: New measures to ease cost of living pressure come into force Apr 1

• UK pay body sees potential 3.7% rise for minimum wage in 2027

• Support 1.3200-10. 1.3170-75, resistance 1.3265-70, 1.3300

• Ranges : Asia 1.32215-1.32525, Tuesday 1.3160-1.3264
How inflation in the UK has moved:

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

• AUD/USD +0.2% Wed as markets embrace potential as Iran war de-escalation

• Trump flags end of attacks on Iran in 2-3 weeks, will address nation Wed

• Unconfirmed reports Iran president wants ceasefire, but war still raging

• AUD continues to be news reactive with support/resistance widely dispersed

• U.S. Feb retail sales due Wed (poll +0.5% m/m), Mar NFP Fri (poll +60K)

• AU Feb balance of trade due Thur, Reuters poll consensus 2.58 bln surplus

• Range Asia 0.68975-0.6930, support 0.6834 0.6660, resistance 0.7188 0.7282
AUD Daily 55-DMA

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

• USD/JPY from 158.45 early low to 159.00 EBS on demand into Tokyo fix

• Japanese importers again behind move, likely buying after fall yesterday

• This demand looks to have been sated however with USD/JPY back down

• Pair currently holding around 158.77, market on thin side and volatile

• Players suggest range for Asia session may have been set barring fresh news

• Threat of FX intervention likely to continue to help cap upside

• Related comment , also , for more click on [FXBUZ]

USD/JPY hourly:

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

• AUD/USD +0.4% Wed as enthusiasm for Iran war ceasefire gathers momentum

• Trump to address nation with important update on Iran 0100 GMT Thur

• Unconfirmed reports Iran president wants ceasefire improves sentiment

• AUD will remain reactive to war related macro news for time being

• U.S. Feb retail sales due Wed (poll +0.5% m/m), Mar NFP Fri (poll +60K)

• AU Feb balance of trade due Thur, Reuters poll consensus 2.58 bln surplus

• Range Asia 0.68975-0.6927, 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 as much as 6.6% to 17,763 points, highest since March 16

• Gold rose overnight because of some increased optimism about de-escalation in Middle East and as U.S. dollar weakened

• Sub-index on track for three straight weeks of gains; set for its best day since March 25

• Resolute Mining , Evolution Mining gain as much as 5.9% and 1%, respectively

• YTD, AXGD down 6%

(Reporting by Roushni Nair in Bengaluru)

Morgan Stanley Research previews the US February retail sales report on Wednesday.

"We expect retail sales rose 0.6% m/m in February and control group sales rose 0.2%. Headline sales are boosted by autos, +2.0%, and we also expect a rebound in restaurant spending, +0.5%. Weaker labor income in February weighs on control group sales, and high prices mean sales are especially weak in real terms," MS notes.

"This forecast would be in line with 1Q real consumption up 1.2% q/q saar. However, the real spending measure is held back by residual seasonality in prices—probably worth a bit more than ¼ pt," MS adds.

• AUD/USD +0.7% late Tue as hope of Iran war de-escalation buoys risk appetite

• Unconfirmed reports Iran president wants to end war, Trump teasing ceasefire

• USD index & UST yields lower, WTI -1.4%, U.S. equities sharply higher

• AUD pushing upper hourly Bollinger band, progress higher likely to slow

• U.S. Feb retail sales due Wed (poll +0.5% m/m), Mar NFP Fri (poll +60K)

• AU Feb balance of trade due Thur, Reuters poll consensus 2.58 bln surplus

• Overnight range 0.6835-0.69039, support 0.6660, resistance 0.7250 0.7282
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

The dollar weakened broadly on Tuesday as equities climbed on hopes that de-escalation in the U.S.–Israel conflict with Iran may spare Washington from taking immediate action to reopen the Strait of Hormuz. President Donald Trump urged those countries that did not help in the U.S.-Israeli strikes on Iran to buy American oil and go to the Strait of Hormuz and "just TAKE it," adding that the hard work is done. Trump told the New York Post that the war against Iran won’t last "much longer" and that the Strait of Hormuz will reopen "automatically" after U.S. exit. Defense Secretary Pete Hegseth said the coming days will be decisive, said the U.S. has carried most of the burden against Iran, and declined to reaffirm America’s NATO defense commitment, deferring to President Trump. Iran’s Revolutionary Guards said they will target U.S. companies in the region from April 1 in retaliation for attacks on Iran, state media reported. Later in the session, Iranian Foreign Minister Abbas Araqchi said he has received direct messages from U.S. envoy Steve Witkoff but stressed they do not amount to negotiations, while unconfirmed reports circulated of Iran's president saying the country was ready to end the war, assuming some guarantees. Ahead of Friday’s jobs report, U.S. data showed job openings fell more than expected in February and hiring sank to a near six-year low. Kansas City Fed President Jeff Schmid cautioned that higher energy prices may not prove transitory, noting inflation was already near 3% and progress toward the Fed’s 2% goal had stalled.

OPEC oil output plunged in March to its lowest level since the height of the COVID-19 pandemic, a Reuters survey found.

The dollar index slipped back below the 100 mark after a bout of month-end demand at the London fix briefly underpinned a rebound. Currency volatility eased across the board, with euro one-month implied volatility falling to a more than two-week low, keeping convexity well bid. EUR/USD extended its rally after briefly easing around the London fix, hitting a three-session high near its 21-DMA, with rising daily RSI offering support. EUR/CHF is up the most in nearly a year anticipating the Swiss National Bank will look to counter franc strength. GBP/USD rose with moves largely dollar-driven as sterling remains heavy on the crosses, with cable vulnerable below resistance at 1.3310/30. AUD/USD climbed as risk sentiment improved and U.S. yields fell, with a rising daily RSI and a break above the cloud base offering near-term support.

USD/JPY edged lower toward its 21-day moving average as U.S. yields declined, with April 1 downside seasonality in play and attention turning to the Q1 Tankan as a potential catalyst for firmer BOJ hike expectations.

Treasury yields were down 2 to 3 basis points, leaving the 2s-10s curve nearly unchanged at 50.1bp.

The S&P 500 rose 2.5%.

WIT oil fell about 1%, briefly dipping beneath $100/bbl.

Gold rose 3.4% and copper gained 2.1% Heading toward the close: EUR/USD +0.66%, USD/JPY -0.54%, GBP/USD +0.34%, AUD/USD +0.60%, DXY -0.53%, EUR/JPY +0.12%, GBP/JPY -0.20%, AUD/JPY +0.04%.(Editing by Burton Frierson Reporting by Robert Fullem)

• NY opened near 0.6850 after 0.6834 traded overnight, pair rallied early, hit 0.6890

• US$ buying for end of month emerged, AUD/USD quickly fell to 0.6835

• Buyers emerged again however as upbeat risk sentiment emerged

• US$ was sold broady, US yields remained lower on the session

• USD/CNH fell to 6.8896 while oil gave up some gains & gold, silver and stocks rallied

• AUD/USD hit 0.6900, sat near 0.6890 late, the pair traded up +0.57% late in the day

• Rising daily RSI, move babove the daily cloud base give AUD/USD bulls some comfort

• Diverging monthly RSI, monthly bear engulfing candle are concerns for bulls
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Goldman Sachs discusses the scope for a shift in market dynamics from energy shock to growth shock.

"The recent oil price shock has driven the Dollar and yields higher primarily through a large increase in inflation pricing globally, with the Dollar benefiting most from its safe-haven status and the US’s net oil exporter position. While markets have been more focused on the inflation consequences of the energy price shock rather than the growth downside, we see risks skewed towards that changing over the near term if the conflict and associated disruption extends," GS notes.

"A shift towards larger downside growth risks would likely temper broad Dollar appreciation against G10, favoring safe havens like JPY and CHF, and leading to deeper EM underperformance," GS adds.

• Ether rallied 2011.63-2088.16, rallied above the 50- & 10-DMAs, up +2.11% at writing

• Rally followed Monday's doji candle, a bull signal;reinforces bull sign from daily RSI

• Longer-term signals likely still remain concerns for Ether bulls however

• Monthly inverted hammer in place for March, consolidation of drop form Jan. high persists

• Bear flag continuation pattern on daily charts add to the bearish tech signals

• Flag base, Feb. monthly low are impediments for Ether bears

• Breaks of both bring the 2025 yearly low, 1200.00 area into focus
eth


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

Bank of America Global Research previews the US March jobs report on Friday.

"After job growth came in below all expectations in Feb, we look for NFP to rebound to a solid 65k (private: 75k). The weakness in Feb was largely due to cold weather and the Kaiser strike. We expect some payback this month. Education & health, leisure & hospitality and construction should lead job gains. Both initial and continuing claims were benign during the survey week," BofA notes.

"More importantly, we expect the u-rate to rise to 4.5%, with some risk of rounding down to 4.4%. This is indicative of stable labor market but with some downside risks," BofA adds.