Credit Agricole CIB Research previews tonight's RBNZ July policy meeting.

"The market is too complacent about a rate hike by the RBNZ on Wednesday. The rates market is about 70% priced for a 25bp hike after the central bank narrowly missed hiking rates in May in a split vote where the Governor Anna Breman cast the vote to keep rates on hold. We think that this week's meeting will be another close call and a split vote," CACIB notes.

"The knee-jerk reaction in the NZD would be lower in the event of the RBNZ holding off raising rates. We think this move lower in the currency would be restricted by hawkish rhetoric and the view that the RBNZ is merely delaying the inevitability of higher rates by only six weeks and until the next MPS," CACIB adds.

• AUD/NZD bias remains constructive, despite recent price action stalling ahead of the 1.23 handle

• Trend structure intact, with spot holding above the 100-day MA cluster that has underpinned the move

• Cycle high at 1.2284 remains the immediate topside focus

• Near-term macro catalyst: RBNZ policy decision (Wed)

• Risk skew tilted dovish, with recent oil price correction reducing pressure to tighten

• Policy guidance likely to pivot toward data dependency, stepping back from a firm hiking bias

• This poses downside risks for NZD near-term

• AUD/NZD upside remains open, with scope to break and extend through cycle highs if dovish repricing materialises
AUDNZD daily chart


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

Bank of America Global Research discusses the scope for another round of FX intervention by Japan's MoF.

"Our usual checklist for FX intervention has mostly been ticked off. The following factors typically precede MoF intervention: a new cyclical high in USD/JPY, unstable JGB market, "behind the curve" market narrative on monetary policy, two consecutive days of sharp USD/JPY gains driven by yen weakness rather than US dollar strength and MoF's currency chief Mimura's comments," BofA notes.

"Higher volatility is perhaps the only condition that has not been triggered - 1m implied volatility has risen but not above 8%, the level before the April intervention," BofA adds.

Goldman Sachs Research revises its EUR/USD forecasts lower.

"For much of the past few months, we have said that economic trends should support the Dollar against low yielders on a tactical horizon, and revised our forecasts in that direction in mid-March. We increasingly think these forces look likely to linger for longer, and we are unlikely to return to broad-based, sustained Dollar depreciation for some time," GS notes.

"To reflect an ongoing divided Dollar environment, we are revising our forecasts for EUR/USD to 1.14, 1.12 and 1.12 in 3, 6 and 12 months (from 1.14, 1.18 and 1.20 previously)," GS adds.

• Cable has traded a 23.8 pip range since the London open; 1.33695-1.33933

• The peak of that range is 7.2 pips shy of Asian session three-week high

• Pound hit new one-year high vs euro, 1.1718, during the European morning

• Sterling buoyed by positivity towards presumptive UK PM Burnham

• Britain will need vast fiscal tightening to avoid debt spiral, OBR predicts

• BoE is worried about risks hitting simultaneously, Bailey says

GBPUSD


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

July 7 (Reuters) - A bounce off a key technical support has shifted the near-term bias for the Australian dollar, with improved risk appetite and a reassessment of U.S. rate expectations adding further fuel to the recovery.

AUD/USD had been grinding lower in a choppy downtrend since posting a cycle high of 0.7277 in early May. The correction found its floor at 0.6862 on June 30, where the 200-day moving average - a dynamic support that has underpinned the market since November - successfully defended the trend. That level, now at 0.6871, remains the pivotal technical reference. A sustained close below it would neutralise the recovery thesis.

For bulls, Fibonacci retracement levels drawn off the 0.7277–0.6862 May-to-June bear leg offer a clear roadmap. The 38.2% retracement at 0.6963 represents the minimum corrective objective, with the 50% level at 0.7072 and the 61.8% Golden Ratio at 0.7120 providing progressively more significant resistance targets. Notably, a daily Ichimoku cloud twist between 0.7088 and 0.7093, projected out to July 22, converges closely with the 50%-to-61.8% retracement zone. Cloud twists following a potential trend reversal have a well-documented tendency to act as price magnets, reinforcing this as a high-conviction target band.

On the macro side, interest rate divergence remains the dominant driver. The Reserve Bank of Australia's June policy meeting has been interpreted hawkishly by the market, with analysts citing persistent excess demand and capacity constraints as evidence that the bank is in no rush to pivot dovish. This stands in contrast to growing expectations for Fed easing, a dynamic that continues to compress the yield differential in Australia's favour and underpin AUD demand.

That said, the recovery narrative carries meaningful tail risks. Australia's May trade balance unexpectedly swung to a deficit of AUD 3.02 billion - the largest shortfall since December 2015 - a reminder that the commodity export story is not without cracks. Any renewed deterioration in risk sentiment or a hawkish Fed repricing could quickly expose the fragility of the current bounce. Traders should treat the 200-day moving average as the line in the sand: while it holds, the path of least resistance favours the upside, but conviction above 0.7072 will be needed to confirm a more durable trend reversal.
AUD/USD daily chart:


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

• USD/JPY price action remains jittery. Intervention risk still elevated at current levels

• Spot easing off overnight highs (162.18), though downside remains shallow for now

• Japan FX diplomat flagged ongoing coordination with South Korean counterparts

• Continued lack of action from MoF has emboldened yen shorts in the near term

• That said, risk profile remains asymmetric, with scope for a sharper corrective move lower

• Near-term catalyst vacuum persists, leaving carry dynamics supportive - JPY negative at the margin

• Levels in focus: Resistance: 162.50, 162.84 (cycle high). Support: 160.70 (prior intervention zone), 160.00
USDJPY hourly chart


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

• Forward-looking FX options have seen increased demand for USD/JPY strikes as high as 165.00

• A break above 163.00 barriers would benefit holders - amplifying volatility and extending upside potential

• These flows signal the market isn't ruling out further upside, with 165.00 mooted as a new potential BoJ line in the sand

• For now, USD/JPY remains anchored well below 163.00, pressuring implied volatility and option premiums

• Risk reversal contracts retain a firm JPY call premium over puts - underscoring the ever-present threat of intervention
USD/JPY FX option implied volatility


USD/JPY 25 delta risk reversals


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

• Cable has traded a 22.5 pip range thus far Tuesday; 1.3378-1.34005

• 1.34005 is the highest level since June 17 (hawkish Fed hold that day)

• 200DMA helps define that high. 1.3329-1.3397 was Monday range

• CFTC data: net GBP short fell 3% to 102,147 contracts in week to June 30

• Modest dip followed 47% jump to nine-year high in the prior week

• Britain's bond market may limit what Burnham can do as PM

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 Tuesday July 7

• EUR/USD: 1.1350 (1.5BLN), 1.1400 (1.25BLN), 1.1425-30 (955M), 1.1440-50 (1BLN), 1.1490-1.1500 (3.3BLN)

• USD/CHF: 0.8000 (402M), 0.8115 (601M)

• GBP/USD: 1.3350-60 (817M). EUR/GBP: 0.8660 (337M)

• AUD/USD: 0.6925-30 (1BLN), 0.6960-70 (465M), 0.7000 (272M)

• USD/CAD: 1.4100 (739M), 1.4250 (297M)

• USD/JPY: 161.00 (702M), 161.20 (626M), 161.50 (718M), 162.00 (2.7BLN), 162.45-50 (1.1BLN)

• EUR/JPY: 183.75 (240M), 185.90 (200M)

• FX options wrap - Summer calm before US CPI storm? (Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/CNH inches up to 6.7970, probing 55 DMA, Ichimoku cloud resistance

• Chart barrier around 6.7960 deflected attempt to rally on Monday

• Another failure could see a potential break of 21 DMA support 6.7847

• As USD/JPY tips over 162.00, long-USD bets in AXJ may pare as well

• PBOC says China, HK to expand Bond Connect quota

• Also says national FX reserve will increase investment in HK markets
CNH


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

• GBP/USD stays supported in Asia after closing 0.3% higher on Monday

• Holds overnight gains as dollar sags on waning Fed rate hike expectations

• Buoyed by strength vs peers; EUR/GBP languishes at a 1-year low

• GBP/JPY hovers near 18-year highs after hitting highest since the GFC

• Traders await likely PM Andy Burnham's finance minister pick

• Polymarket gives Ed Miliband a 55% chance of becoming finance minister

• Could weigh on GBP given his preference for more expansive fiscal policy

• Strong resistance at 1.3400-10, 50% of May-June drop and a cluster of MAs

• Support 1.3330-40; Monday range 1.3329-1/3397, Asia 1.3389-1.3400
GBP:

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

• Australian gold miners fall as much as 3.1%, their biggest intraday pct decline since June 30

• Gold prices fell on Tuesday, as investors looked ahead to the release of the U.S. Federal Reserve's June meeting minutes for insight into new Chair Kevin Warsh's monetary policy direction [GOL/]

• Sector heavyweight Evolution Mining sheds 3.7%, and Northern Star Resources slides 3.2%

• YTD, sub-index down more than 21%

(Reporting by Shruti Agarwal in Bengaluru)

• USD/KRW shows resilience in the face of KOSPI tanking 4.2%

• Last 1430.1 even as USD/JPY ekes out gains above 162.00

• Potential USD/JPY rally may be next catalyst for USD/KRW

• But while 21 DMA caps at 1532.4, upside room remains limited

• Recent sharp drops may have left some longs stranded still

• S. Korea officials jawboning last week may also lure cherry-pickers
KRW


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

• USD/JPY rallied back to 162.43 EBS yesterday after no Japan FX intervention

• Asia so far today 162.01-16, on buoyant side, could head higher

• Some resistance though from descending hourly Ichi tenkan at 162.16

• 161.92 kijun support? Descending 100-HMA 161.91, ascending 200-HMA 161.90

• Hourly cloud below between 161.18-55

• $2.7 bln in option expiries today at 162.00 providing gravitational pull

• Large below and above too, to help contain spot

• Japanese importer demand out of Tokyo to remain relentless, retail too

• Rallies in Japanese equities, foreign buys to trigger currency hedges again

• Little relief seen for JPY with BOJ behind the curve, no MOF FX action

• Intervention risk still seen however, especially closer to 163.00

• JGB-US Treasury rate differentials narrower, in 10s especially at @163 bps

• This JPY supportive but difficult to say to what extent

• Related comments , , ,

• Also

• US markets , , ,
USD/JPY:


Nikkei 225:

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

• AUD/USD winches higher to 0.6956, with risk-on fuelling gains

• But even after escaping Bollinger downtrend channel, bulls face a test

• Looming 21 DMA at 0.6975 may attract some profit-taking offers

• A hard shove will be needed to break that key technical resistance

• If it cracks, Bollinger uptrend channel at 0.7034 will attract bulls

• ASX ebbs -0.1% while Asia FX markets eye USD/JPY nervously
AUD


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

ANZ Research discusses its latest outlook for the Fed rates trajectory.

"Our baseline view is that the Fed is on an extended pause into the middle of next year before it will gradually ease rates by 50bp, subject to how data evolve in coming months, particularly the evidence on inflation pass-through," ANZ notes.

"We judge price shocks have not driven a persistent acceleration in broader inflation, while there is some evidence that the inflationary threats of recent price shocks are waning. Moderating wage settlements, well-anchored inflation expectations, gradually slowing median and trimmed mean inflation all support this conclusion. An extended pause should ensure inflation returns to target," ANZ adds.

• EUR/USD off session lows to trade broadly flat, ranges tight (1.1410–1.1450) with catalysts lacking

• Market reluctant to chase EUR upside evidenced by backing off from post-payrolls squeeze high at 1.1473

• 1.1473 now the key near-term, break opens up 1.15. Failure keeps downside risks in play

• Light data calendar reinforces consolidation bias into US.. CPI (14 July)

• Support at 1.1350–1.1360, then 1.1300–1.1320
EURUSD hourly chart


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

Credit Agricole CIB Research discusses the scope for another round of JPY intervention by Japan's MoF.

"The risk of intervention reduces the demand for being long USD/JPY as a carry trade. And the MoF has enough FX reserves to perform over 15 more FX interventions of the size it did during April and May. With USD/JPY clearing the important 162 level, however, the key battleground for the exchange rate in the 162-164 region has opened up. The decline in USD/JPY over the past year has now reached double digits accelerating its upward pressure on inflation. This will anger voters. While the government is already doing quite a bit to relieve inflation pressures on households including subsidised retail energy, fuel and utility bills, Japan’s households know a higher USD/JPY will eat into these subsidies," CACIB notes.

"In the end, Japan benefits from a weak JPY and so has to manage the political and economic realities around the currency. The weak JPY is boosting company profits, exports and importantly is helping lift domestic investment to the levels Takaichi wants to see during her tenure. So we think Japan’s authorities will continue to manage a weak JPY but avoid USD/JPY moving above 164 in the long term," CACIB adds.

• USD/CAD back near recent highs. Last week’s hold above 1.4140 pivot keeps tone constructive

• Price action consoliating now after the unwind of the NFP-led dip to 1.4151

• Near-term range defined at 1.4140-1.4250

• Bias to range trade into U.S. CPI (Jul 14), breakout needed to shift stance

• Light data calendar near-term reinforces range dynamics
USD/CAD hourly


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

Bank of America Global Research discusses USD/JPY technical outlook.

"USDJPY's breakout above 161.95 advances the secular uptrend in favor of it continuing toward ~175. Specifically, two measured moves have estimated a secular target area of 174.61-176.56. A monthly candle close above ~162 would strengthen the signal. Given BoJ intervention risk, ideally price remains above the May 2026 low at 155," BofA notes.

"The RSI has risen above 65 and the MACD crossed up while above the zero line. Both suggest the rally can persist. Forthcoming upside targets include the 61.8% measured move extension at ~163.95, followed by 166.46 and 170. A weekly close below 155.04 reduces uptrend conviction," BofA adds.

• Shares of Michael Saylor's Strategy drop 4.4% after the company discloses it sold 3,588 bitcoin last week

• MSTR's bitcoin purchases and sales have become a key barometer of sentiment toward the crypto industry

• Any sale is often interpreted as a sign that confidence in the sector is weakening, a perception that can in turn weigh on MSTR's own prospects

• "Sell a kidney if you must, but keep the Bitcoin," Saylor, one of bitcoin's most influential evangelists, once posted on X

• MSTR is still the biggest corporate holder of bitcoin, however

• The bitcoin accumulator had nearly $52 bln worth of bitcoin on its balance sheet, as of Sunday, according to Reuters calculations based on company filings

• The stock has lost over a third of its value so far this year

(Reporting by Niket Nishant in Bengaluru)

Goldman Sachs Research revises its USD/JPY forecasts higher.

"We see no reason for the upward trend in USD/JPY to stop without an unexpected negative US growth shock or a BoJ pivot towards more aggressive policy tightening...Intervention can slow the move and buy time for a potential shift in the macro that then leads to sustained Yen appreciation. But without that, the impact ultimately proves short-lived with diminishing effect, and we think that either a recession or more rapid BoJ hikes look unlikely over the coming year.

That implies that the trend higher in USD/JPY should extend, even if there are additional rounds of intervention that successfully reset the exchange rate to lower levels and suppress vol for some time," GS notes.

"Therefore, we have revised up our forecasts to 162, 163, 165 in 3, 6, 12 months (vs. 160, 158, 155 previously).," GS adds.

• Cable has traded a 21 pip range since the London open; 1.3329-1.3350

• 1.3329 is also the low water-mark since Friday's 1.3380 high

• Pound last week rose 1.1% vs USD, its biggest weekly gain in three months

• UK June construction sector PMI 38.4 vs 40.0 forecast

• U.S. June ISM services index due at 1400 GMT; 54 forecast

• Burnham is expected to replace Starmer as UK prime minister on July 20

GBPUSD


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