• USD/JPY stays in narrow 142.28 to 143.45 EBS range as US shares rally

• Yields ease after Fed comments about future growth worries

• Some hope of trade progress after Trump said US-China reps talked

• Yen vols ease across tenors as US shares advance

• Japan considering US soybean imports as part of negotiations: Nikkei

• Focus turns to April Tokyo CPI on Friday

• Pair holds above Apr 22 high, 200-HMA; 144 double-bottom offer resist.

• Supp: 141.68, April 22 high; 141.54 Wed low; 140.48 Apr 21 low

• Resist: 143.99-144.00 April 9-10 lows; 144.55 April 4 low
Yen

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

• Shares of copper miners rise as prices of the red metal increase on a weaker U.S. dollar, even as uncertainty over U.S. tariffs remained

• Benchmark three-month copper on the London Metal Exchange up 0.4% at $9,418 a metric ton after hitting a peak of $9,481.50 in the previous session to touch its highest since April 3

• A weaker U.S. currency makes dollar-priced commodities such as copper less expensive for buyers using other currencies

• U.S.-listed shares of global mining giants Rio Tinto

and BHP Group rise 2.5% and 1.7%, respectively

• Copper miners Southern Copper up 3.8%; and Freeport-McMoRan up 6.1% after posting Q1 results

• Shares of Canadian miners Hudbay Minerals up 4.5% and Teck Resources rise 5.1%
(Reporting by Sumit Saha in Bengaluru)

Synopsis:

Danske Bank has shifted to a bullish stance on EUR/USD, citing both near-term macro risks and longer-term structural forces that favor euro strength. The bank now sees EUR/USD reaching 1.16 in one month, 1.18 in three months, and 1.22 over a 12-month horizon.

Key Points:

• Short-Term USD Pressures:
  Concerns about confidence in US assets, as well as rising recession risks, are expected to weigh on the dollar in the coming weeks. Danske sees these forces as providing immediate upside for the euro.

• Structural Dollar Weakness:
  Over the medium term, Danske highlights a combination of capital rotation away from US assets, political uncertainty, and continued fallout from the trade war as drivers of a sustained USD depreciation.

• Forecast Trajectory:
  Danske now targets EUR/USD at:

  • 1.16 in 1 month

  • 1.18 in 3 months

  • 1.22 in 12 months

• Risks:
  A sharper-than-expected US recession could propel EUR/USD even higher than forecast. On the flip side, a reversal in Trump administration trade policy or a confidence-restoring event could provide temporary USD support, though Danske doubts this would fully restore investor sentiment.

Conclusion:

Danske Bank expects a broad-based euro appreciation against the US dollar, driven by near-term macro risks and longer-term structural trends. The outlook remains bullish barring a major policy reversal or unexpected US economic strength.

• GBP slips through 1.33, BoE's Bailey leans dovish

• Bailey says he is focused on the growth hit from tariffs

• With ECB leaving the door ajar to a larger

• Difficult to see past a more dovish reaction function from the BoE

• Little doubt over a May cut. Instead focus remains on openness to June a cut

• Consequently, positioning for dovish BoE remains favourable

• GBP event risk: UK retail sales data due Friday at 0600 GMT
BoE pricing

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

Synopsis:

Société Générale maintains a bearish outlook on the US dollar in light of structural policy shifts but acknowledges the near-term disconnect between the dollar’s performance and underlying economic fundamentals. The divergence between DXY and Fed Funds pricing suggests the market may have priced in too much USD weakness too quickly.

Key Points:

• Structural Policy Shifts Point to a Weaker USD:
  SocGen argues it is hard to imagine the US achieving its reindustrialization goals with a strong dollar. The combination of tariffs, deglobalization, and fiscal expansion supports a structurally weaker USD.

• FX Market May Be Overshooting Fundamentals:
  The sharp fall in DXY appears faster than the actual pace of economic slowdown. The charted divergence between DXY and December 2025 Fed Funds pricing illustrates a potential misalignment that may self-correct.

• IFO Data Adds EUR Tailwinds:
  A strong German IFO survey added pressure to the dollar, reinforcing the euro’s rally and reflecting improving sentiment in the euro area relative to the US.

• Psychological Inflection Point at DXY 100:
  A break back above DXY 100 could unsettle dollar bears, especially if supported by resilient US data. Absent that, the market is likely to maintain its negative view on the dollar.

Conclusion:

SocGen continues to view the dollar as a sell-on-rallies trade within a broader bearish trend. While the market may have front-run fundamentals, the long-term narrative of US policy-induced USD weakness remains intact. Near-term, the risk of a tactical USD rebound exists if US data surprises to the upside, but the broader trend points to further dollar downside.

• Cable has traded a 23.5 pip range since the NY open: 1.3321 = session high

• 1.3321 is also high water-mark since 1.3250 NY session low Wednesday

• Wednesday range was 1.3234-1.3339 (1.3422 was seven-month peak Tuesday)

• U.S. weekly jobless claims 222k, exactly as forecast

• UK March retail sales data due on Friday at 0600 GMT; minus 0.4% MM forecast

• UK's Reeves expresses confidence about reaching trade deal with U.S.

GBPUSD

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

Synopsis:

Credit Agricole sees the recent rally in EUR/USD as inconsistent with traditional trade war dynamics and likely unsustainable. They argue the pair is overbought, overvalued, and vulnerable to ECB pushback, making it a sell-on-rallies candidate in the near term.

Key Points:

• Lagarde Flags EUR Strength as “Counterintuitive”:
  ECB President Christine Lagarde questioned the logic of recent EUR appreciation amid a global trade war, suggesting policymakers see the move as at odds with macro fundamentals.

• FX Theory Suggests EUR Should Weaken:
  Historically, currencies of countries hurt by tariffs (like the Eurozone) tend to weaken to cushion the growth hit, while currencies of tariff-imposing countries strengthen due to higher inflation.

• Strong EUR May Prompt ECB Dovishness:
  The sharp rise in EUR NEER since early 2025 could tighten financial conditions and undermine growth and inflation, possibly forcing the ECB into a more dovish stance.

• Valuation and Positioning:
  Credit Agricole believes EUR/USD is overvalued at current levels, with positioning already stretched and vulnerable to reversal.

Conclusion:

EUR/USD is seen as fundamentally misaligned with trade war dynamics and central bank objectives. Credit Agricole recommends treating it as a sell on rallies, particularly if ECB rhetoric turns more explicit in managing FX-related tightening risks.

Synopsis:

BofA warns that Japan’s upcoming Upper House election, potential US-Japan trade deals, and limited fiscal space could skew risks toward a weaker JPY over the summer.

Key Points:

• Election Season Uncertainty:
  A US-Japan trade agreement could modestly boost approval ratings for the Ishiba administration, but uncertainty over economic measures and voter response remains.

• No Supplementary Budget (Yet):
  The government has held off on a stimulus package, but growing pressure from constituents to respond to US tariffs may trigger fiscal pledges closer to the election.

• Limited Fiscal Room:
  Unlike Germany, Japan has limited capacity for fiscal expansion due to its very high debt-to-GDP ratio, raising the risk of a fiscal risk premium on JGBs.

• Tariff Relief May Be Partial:
  Even if a deal is reached, effective tariffs are expected to remain higher than pre-2025 levels, sustaining pressure on the economy and currency.

Conclusion:

With election-driven policy uncertainty and fiscal constraints, JPY may face downward pressure in the months ahead—even if trade tensions ease—particularly if investors begin to price in political instability or fiscal strain.

• AUD/USD fell to 0.6344 in Europe's morning, pair hit a 5-session low then rallied

• Pair rallied back above the 10-DMA, turned positive, hit 0.6389 early NY, was up +0.44%

• Softer US yields , US$ helped buoy; USD/CNH fell below 7.2900

• Equity bounce off low & commodity gains also helped lift AUD/USD

• A daily bull hammer candle formed and daily RSI turned upward again

• Daily signals reinforce bull signs from rising monthly RSI, monthly bull hammer candle

• US jobless claims, March durable goods & existing home sales are data risks
audusd


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

• AUD/USD hits 0.6388 intra-day high after rising from 0.6345

• 0.6345 was one-week low just before 0600 GMT (0.6350 was Wednesday low)

• Ascent from 0.6345 influenced by bias to "sell USD rallies"

• Resistance levels include 0.6400 and 0.6439 (Tuesday's four-month peak)

• U.S. weekly jobless claims data due at 1230 GMT; 222k forecast

• Australian CPI data due next week. RBA 25 bps rate cut expected on May 20

AUDUSD

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

• EUR/CHF rises to 0.9416 EBS high as German IFO beat buoys euro

• 0.9416 is highest level since April 7 (0.9418 is 200-day moving average)

• Wednesday's EBS high was 0.9411, as safe-haven franc weakened on Bessent

• Bessent said high tariffs between the U.S. and China are not sustainable

• SNB's Q1 profit reduced by losses from its foreign currency positions

• SNB chief Schlegel due to address SNB shareholders on Friday (0800 GMT)

EURCHF

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

• USD/JPY rebounded from Tue's multi-month 139.89 low, peaked at 143.58 on Wed

• Bullish signal: close above the broken 142.56 Fibo, on Wednesday

• 142.56 Fibo is a 23.6% retrace of the 151.21-139.89 (March-April) EBS drop

• Bearish signal: daily tenkan and kijun lines remain negative aligned

• A break and close above 144.21 Fibo would point to an even bigger recovery

• 144.21 Fibo is a 38.2% of the 151.21-139.89 same (March-April) drop

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

• Implied volatility gauges real volatility risk for FX option premiums

• It's falling in G10 FX - including EUR/USD and now well below Mon-Tue peaks

• Benchmark 1-month expiry is 9.75 from 10.4 Wed and 11.75 spike high Mon-Tue

• It was 9.2 prior to gains early Friday, so could be where it finds support

• Current levels still elevated when compared to late March lows near 7.0

• However, risk reversals maintain high premium for topside vs downside

• Shows options market still sees topside as more vulnerable side of market

• FX Options wrap
EUR/USD FXO implied volatility


EUR/USD risk reversals

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

• USD/CNH tugged lower to 7.2977 from Thurs high 7.3036

• May gravitate toward 100 DMA support currently at 7.2904

• Thurs close below will persuade weak USD longs to bail

• That might weigh toward 23.6% Fibo support at 7.2794

• Tentative pullback in USD/JPY drags DXY and USD/AXJ down

• PBOC says China will continue to open up markets
CNH:

(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• A two-day pullback and drop from 1.3422, a new 2025 high

• Sterling currently sat on the 10-day MA at 1.3258

• Daily kijun at 1.3245 is converging on the 10DMA

• Fourteen day momentum is diverging bullishly

• Daily RSI is hovering just below overbought values

• A minimum correction off the 1.2712-1.3422 climb removed at 1.3254

• The 38.2% and 50% retracements are at 1.3151 and 1.3067, respectively

• A close below the 10-DMA needed to de-rail the underlying bull run
GBP/USD daily candle chart:

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

• Australian gold stocks rise as much as 2.4% to 12,050.9 points, last up 1.9%

• Sub-index lost 9.8% at close in the previous session as prices of safe-haven bullion were threatened by easing tensions surrounding trade relations between U.S. and China

• However, gold prices are back up on the day amid dip buying [GOL/]

• Gold major Evolution Mining jumps 1.2%, while larger peer Northern Star Resources is up 0.4%

• West African Resources is up 6.7%, while Bellevue Gold soars some 4.1%

• YTD, AXGD up 42.1%

(Reporting by Nichiket Sunil in Bengaluru)

Synopsis:

Goldman Sachs expects Thursday’s US Durable Goods report to reveal a sharp rise in headline orders, but a soft core print, signaling early pressure on business investment from the trade war.

Key Points:

• Headline Durable Goods Orders:
  Forecasted at +5.0% (vs. +1.5% consensus), driven by a spike in commercial aircraft orders.

• Core Capital Goods Orders (ex-aircraft & defense):
  Expected at –0.2% (vs. +0.1% consensus), reflecting March declines in manufacturing survey components, particularly new orders and shipments.

• Implication:
  While the headline figure will appear strong, underlying business investment is likely weakening, offering one of the first quantifiable signs of trade war stress in capex data.

Conclusion:

Goldman warns that Thursday’s data may mask core weakness beneath a strong headline, as trade-related uncertainty begins to weigh on corporate investment decisions.

• AUD/USD near week's 0.6350 low as liquidity dissipates ahead AU holiday Fri

• Risk of stop-loss selling below 0.6350, but recent USD strength unconvincing

• DXY relatively close to three-year lows, remains vulnerable to policy shifts

• White House attempts to diffuse CN trade & Fed tensions, will be difficult

• U.S. Mar durable goods due Thur (poll +2.0%); Critical AU Q1 CPI Apr 30

• Range early Asia 0.63565-72, support 0.6350 0.6180, resistance 0.6440 0.6550
AUD Hourly

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

• +0.15% with the USD -0.05% - low-key Asia after recent Trump-led volatility

• Early Trump said he had a Ukraine deal, then clashed with Zelensky

• USD supported by China trade deal optimism, but unlikely if 2020 is a guide

• German ifo business climate and Buba President Nagel leads EU event risk

• Charts - 21-day Bollinger bands climb, 10 & 21-day moving averages rise

• Daily momentum studies crest - signals retain a net positive trending setup

• Yesterday's 1.1440 top then this week's 1.1572 high are the first resistance

• Last week's 1.1264 base and then the 1.1136 21-DMA are initial supports

• A close below last week's 1.1264 base would leave a neutral setup

• 1.1300 722 mln and 1.1370 984mln close April 24th strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Up 0.15% after closing down 0.6% - resilient with the USD up 0.9%

• Potential U.S. tariff back-down was behind the U.S. dollar recovery

• BoE Gov Bailey said they must take trade war risk to growth very seriously

• UK consumer sentiment -48 in April from -35 - US tariff turmoil reverberates

• Charts - 10, & 21-day moving averages rise, as 21-day Bolli bands climb

• Daily momentum studies crest - mixed signals, but the uptrend survives

• 1.3203 Apr 17 low, then 1.3150 0.382% of the April rise is key support

• The 2024 1.3434 high capped - remains the next significant resistance

• A close below 1.3150 Fibo support would end the topside bias
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• USD/JPY -0.3% as sellers take advantage of Wed 141.54-143.58 rally

• Trump says he has not had contact with Fed's Powell but might call him

• Says he thinks he has a deal with Zelenskiy, Putin

• Adss that any reduction in tariffs on China depends on Beijing's actions

• USD had rallied offshore as Bessent said China tariffs not sustainable

• Bessent also said no specific currency targets in U.S.-Japan trade talks

• Asia range 142.89-143.45; resistance 143.60, 144.20, support 142.60, 142.20
The Fed's foggy outlook:

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

• AUD/USD slipped from its 0.64355 high in NY as USD confidence returned

• White House continues attempts to diffuse CN trade & Fed tensions

• DXY recovery looks fragile, vulnerable to policy shifts, near three-year low

• AUD near hourly lower Bollinger band, oversold and likely to bounce

• Quiet week for AU data; U.S. Mar durable goods due Thur (Reuters poll +2.0%)

• Overnight range 0.6352-0.64355, support 0.6350, resistance 0.6440 0.6550
AUDUSD Hourly Bollinger Band Study


USD Index Monthly

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

Synopsis:

SocGen notes that GBP/USD is nearing the upper limit of a flattish channel in place since 2023. With the pair testing last year’s peak and MACD momentum stretched, there is scope for a pause or pullback, with 1.3060 as near-term support.

Key Points:

• Trend Structure: GBP/USD extended its uptrend after holding the 50-day moving average earlier in the month.

• Channel Resistance: Price is now approaching the upper bound of a long-term consolidation channel, coinciding with the 2023 peak.

• Momentum Indicator: The daily MACD is at multi-year highs—not yet a reversal, but it signals an overstretched rally.

• Support Level: The 1.3060 level, which marked last week’s low, acts as key near-term support in the event of a pullback.

• Upside Targets: Should the breakout sustain, next objectives lie at:

  • 1.3620 (initial projection)

  • 1.3740–1.3810 (wider Fibonacci cluster)

Conclusion:

GBP/USD’s rally is testing a critical resistance zone, with momentum stretched but not reversed. SocGen suggests tactical caution near current levels, with 1.3060 as a pivot, and upside levels at 1.3620 and 1.3740/1.3810 should the move extend.

• GBP$ soft into NorAm close -0.5% at 1.3264; NorAm range 1.3319-1.3250

• Early NorAm gains amid less-vituperative trade, Fed leadership tones reversed

• Trump-Powell feud seen ending restores calm around Fed leadership, markets

• Bessent repeats high tariff not sustainable, talk of 50% tariff w/China boosts risk

• Sterling rebounds as trade and Fed tensions ease nL6N3R10LY

• GBP$ supt 1.3229 rising 10-DMA, 1.3166 Apr 15 low, 1.3067 50% of 1.2712-1.3423

• Res 1.3319 NorAm session high Apr 23, 1.3367 upper 30-d Bolli, 1.3423 2025 high Apr 23

GBP Chart:


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