• Cable hits 1.3379 after extending south from 1.3480 (two-week high)

• Drop to 1.3379 influenced by Iran's war guidance

• Iran's foreign ministry denies talks with US, IRNA says

• 1.3352 (Friday's NY session high) is now a GBP/USD support point

• UK March flash PMIs due on Tuesday at 0930 GMT; services PMI f/c 53

GBPUSD


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

Morgan Stanley Research argues that USD/JPY puts may be increasingly attractive to hedge risk exposure given JPY- positive intervention risks.

"Investor caution on JPY may be related to a host of concerns about fiscal sustainability, the need for BoJ hikes in an environment of energy price-induced inflation, and the effects of higher energy prices on Japanese growth. However, upside risks to USD/JPY appear capped in part by the potential willingness of Japanese authorities to intervene to support the JPY," MS notes.

"Our colleagues write here that recent communication from the Japanese Minister of Finance (including noting that "currency moves have not been aligned with fundamentals for a while, but the deviation appears particularly significant at present") appear to be precursors to intervention or a rate check," MS adds.

• Cable meets fresh headwind around 1.3434 after extending north from 1.3313

• 1.3434 is the 200-day moving average (1.3436 was Friday's Ldn am high)

• Offers by 200DMA also capped the earlier Trump-spurred jump from 1.3269

• 1.3313 was pullback low from the high following Trump's dovish war guidance

• Trump says U.S. has "major points of agreement" in talks with Iran

• Ultra-dove Miran still believes Fed should cut interest rates

GBPUSD


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

Bank of America Global Research flags a bullish quant signal for EUR/CAD over the next 3-6 months.

"EURCAD has been one of the most heavily impacted pairs by the conflict in line with our vol outperformance. However, given recent dynamics of realized vol, we are surprised implieds have not reacted more aggressively. In fact, over the past 1-3m, EURCAD screens as the cheapest vol long when we factor out the dynamic of realized in our PCA framework for G10 FX," BofA notes.

"The macro rationale for bullish EURCAD in a normalization scenario is also appealing. Lower oil prices would benefit energy importers disproportionally vs energy exporters, providing a clear tailwind for EUR vs CAD. The recent labor data miss in Canada also highlights the underlying weakness of the economy heading into difficult USMCA talks, while in a de-escalation scenario we see upside surprises in Europe more likely than downside, especially given Germany's fiscal push," BofA adds.

Goldman Sachs Research discusses the USD near-term outlook.

"Both the broad Dollar TWI and the DXY are about flat YTD and around the levels that have prevailed since the middle of last year. We think that is roughly right as markets grapple with whether the Middle East conflict is merely some turbulence on the Dollar’s descent or a more lasting change in the flight plan," GS notes.

"Under our baseline assumption that global trade flows will normalize over the next month or so, we think the prior themes would dominate once again and weigh on the Dollar. Options market pricing still implies a shorter disruption relative to 2022, which explains the Dollar’s more limited strength so far," GS adds.

March 23 (Reuters) - The option volatility premium and demand for EUR/USD downside strikes remain high, highlighting the negative sentiment that still surrounds this currency pair during the Middle East conflict.

While those concerned about deeper declines can buy a EUR put/USD call strike to gain the right to sell EUR/USD on a future date, their premiums can be significantly reduced by adding a trigger below the strike and turning it into a Reverse-Knock-Out option - a popular strategy/hedge since the start of the conflict.

While RKO options still allow the holder the right to sell EUR/USD, they become worthless if the spot price touches the trigger at any time before the expiry date - hence the discount.

These structures exploit the fact that EUR/USD’s outsized downside-over-upside volatility premium runs in the same direction as the strike. Pricing models therefore assign a higher knock-out probability, which compresses the premium. RKO options are therefore suited to those looking to hedge temporary or limited directional views. They have already reaped rewards for those who bought these options at the start of the conflict.

For example, with EUR/USD spot now at 1.1500, 1-month EUR/USD implied volatility at 8.65 and 1-month 25 delta risk reversal at 1.35 EUR puts over calls, a 1-month expiry 1.1500 EUR put/USD call, which gives the holder the right to sell EUR/USD in a month, demands an upfront premium of 113 USD pips - break-even 1.1387. But add a 1.1200 RKO trigger and that premium falls to 23 pips, or with a 1.1300 trigger, a mere 6 USD pips (break-even 1.1494).

Extending the expiry date, placing the strike further from the current spot and moving the trigger closer to the strike will all reduce the premium and vice versa. The maximum potential loss is limited to the initial premium, but the option becomes worthless if the attached RKO trigger is touched at any time prior to expiry.

Related - FX options' price verdict on Trump’s Hormuz deadline risk (Richard Pace is a Reuters market analyst. The views expressed are his own. Editing by Alison Williams)

• EUR/USD has dropped 1.2084-1.1409 while traders pare exposure

• The target to correct gains seen while longs established is 1.1336

• Traders remain modest long of euro and risk aversion is building

• The liquidation of longs may be followed by move into shorts

• Gas and oil prices remain extremely elevated weighing EUR/USD

• Flight to safety could transform currency markets

• Hungarian forint may be a leading indicator for FX

•
EURUSD and betting


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

• AUD/USD falls to 0.6950 as safe-haven USD strengthens on Iran war escalation

• 0.6950 is the lowest level since March 3 (0.6945 was the low that day)

• U.S. crude rises 3% to $101 as Iran threatens to hit Gulf power infrastructure

• European shares skid to four-month low as Middle East conflict intensifies

• 0.7000 (last Thursday's low) is now an AUD/USD resistance level

• CFTC data: net AUD long rose 28% to 69,061 contracts in week to March 17

AUDUSD


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

• Cable falls to 1.3284 as safe-haven USD strengthens on escalating Iran war

• 1.3284 is the lowest level since Thursday (1.3299 was Friday's low)

• Support points include 1.3247 (Thursday low, before hawkish BoE) and 1.3220

• 1.3220 was 14-week low on March 13 (1.3180 was December 2025 low)

• UK PM Starmer calls emergency meeting on economy as Iran war risks mount

• CFTC data: net GBP short fell by 22% to 65,515 contracts in week to March 17

GBPUSD


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

(Adds story link for EUR buzz)

• Despite selling heavily when gold rising specs selling little since it peaked

• Longs slashed between Jan and Feb remain circa 159,000 contracts

• Gold dropped $600 from record $5595/oz peak before last CFTC report

• Gold has dived by $900/oz to $4100/oz since data collected on Mar 17

• Gold is closing on influential 200-DMA at $4089 and is now oversold

• EUR/USD remarkably resilient given the strength of selling

•
Gold and betting


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

• EUR/USD dropped 1.2084 to 1.1409 while traders pared longs

• The number of longs reduced from $27 billion to $3 billion

• Target to correct 1.0125-1.2084 rise is 1.1336

• While traders remain long, there's far less drag on euro rising

• The correction could prove to be the foundation for a bigger rise

•
EURUSD and betting


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

• Shares of Felix Gold rise as much as 21.7% to A$0.28, their highest level since March 16

• The gold explorer receives bulk sample permit from Alaska Department of Natural Resources (DNR)

• Company says it got approval for bulk sampling trench of 1,600 tons of antimony ore material at the NW Array Prospect within the Treasure Creek Antimony Project

• About 3 million shares change hands, 2.7x 30-day average

• Stock down 29.6% this year, including the day's move

(Reporting by Sherin Sunny in Bengaluru)

• GBP/USD -0.1% in Asia, recovers after gap-down open on Iran war escalation

• Opens at 1.3307 from 1.3342 Fri close but inches back to 1.3340 to close gap

• Trump threatens to strike Iran electricity grid; Teheran says will hit back

• Iran threatens to retaliate against Gulf energy, water after Trump ultimatum

• High oil prices, energy costs limit upside; hawkish BoE expectations support

• UK's Starmer calls emergency meeting on economy Mon as Iran war risks mount

• Support 1.3300,1.3250, resistance 1.3355-60, 1.3400; Fri range 1.3299-1.3439
UK 10-year gilt yield rises to highest since July 2008:

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

• Macmahon Holdings up as much as 4.8% to A$0.66, highest since March 10

• Mining services provider executes Letter of Intent (LOI) with unit Wolfram

• Says LOI to restart operations at its Mount Carlton Gold Mine in Australia

• Adds contract valued at ~A$250 mln ($174.8 mln)

• MAH trims YTD losses to 2.7% ($1 = A$1.4304)

(Reporting by Aamir Sheik Khalid in Bengaluru)

• Australian gold miners fall as much as 5.6% to their lowest since September 22

• Sub-index tracks easing gold prices, which fell ~2% on Friday as dollar firmed on report that U.S. will deploy extra troops in Middle East, fanning concerns of higher oil, inflation, elevated interest rates [GOL/]

• Miners Evolution Mining loses as much as 5.6%; Northern Star Resources sheds more than 5% to lowest since August, 2015

• YTD, AXGD down more than 20%

(Reporting by Rajasik Mukherjee in Bengaluru)

• NZD/USD flat Mon after dipping early on lingering oil price concerns

• Fitch downgrades NZ outlook to negative but keeps rating at AA+ (for now)

• Trump gives Strait of Hormuz ultimatum, Iran vows infrastructure retaliation

• NZD downtrend intact, offers in front of 0.5918 55-DMA inflection point

• RBNZ Governor Anna Breman speaking Tue & Chief Economist Paul Conway Wed

• Range NZ 0.5815-32, support 0.5710 0.5580, resistance 0.5918 0.6092 0.6120
NZD Daily 55-DMA

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

• EUR/USD -0.3% early Mon as markets assess latest U.S.-Iran deterioration

• Trump threatens Iran's electricity supply, Iran promises retaliatory attacks

• Infrastructure destruction will keep oil/gas prices high for extended period

• EUR break below major 1.1390-1.1410 support zone would trigger heavy selling

• Euro zone Mar consumer confidence due Mon, Reuters poll consensus -14.4

• ECB President Christine Lagarde speaking in Frankfurt Wed

• Range Asia 1.15375-57, support 1.1409 1.1392, resistance 1.1667 1.2084
EUR Daily 55-DMA

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

• AUD/USD -0.3% in early Aisa Mon as U.S.-Iran war continues to escalate

• Iran flags retaliation to Trump's threat to 'obliterate' electricity grid

• U.S. deploying Marine expeditionary forces to Middle East

• Non-energy commodities under pressure: LME copper -2.6%, Gold -3.5%

• Futures markets implying 59% probability of 3rd consecutive RBA hike in May

• AU monthly CPI Feb update due Wed, will further shape RBA OCR expectations

• AUD ytd rally intact, major support zone between 0.6900-45 should hold

• Range Asia 0.6998-0.7006, support 0.6945 0.6900, resistance 0.7250 0.7282
AUD Weekly 52-WMA


AUD Hourly Bollinger Study

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

• NY opened near 1.1560, pair neared 1.1580 early, sellers emerged

• US$ rallied on higher yields , bid for safe haven assets

• Stocks, gold fell & USD/CNH turned positive as investors sought safety

• EUR/USD fell below the 10-DMA, hit 1.1525 then turned upward

• EUR/JPY's rally helped EUR/USD near 1.1555 late, EUR/USD was down -0.33% late

• Falling daily, monthly RSIs are bearish, hold above 10-DMA gives bulls some comfort
eurusd


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

• NY opened near 0.7065 after 0.7097 traded overnight, pair rallied early

• 0.7086 traded but sellers emerged as risk soured & US$ safe-haven bid emerged

• Gold, silver, copper, equities all traded downward while USD/CNH turned positive

• US yields rallied which helped to underpin the US$ buying

• AUD/USD fell to 0.7028 & sat nearby late, the pair traded down -0.74%

• Falling daily, monthly RSIs & move below the 10- & 21-DMAs are bear signals

• Head & shoulder top pattern forkming on daily chart reinforces bearish signs
audusd


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

• GBP$ soft in NorAm down 0.68% at 1.3344; NY range 1.3409-1.3299

• Post-BoE rally pared as Mideast tensions, oil price rises show no signs of abating

• Oil (CLc1) near $100/bbl; Brent-WTI spread narrows now $12.5, was $15+ yday

• UK fiscal concerns back in focus as UK gilts rise, UK 10-yr yield at 2008 highs

• ST rates up as well on heightened oil-related inflation angst; BoE seen +84bp by Dec

• GBP$ supt 1.3300/1.3299 psychological lvl/Fri low, 1.3221/20 lwr 30-d Bolli Mar 13 low

GBP$ Chart:


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

Bank of America Global Research highlights the scope for Fed hikes this year.

"Markets have nearly priced out Fed cuts for the year. Clients are starting to ask about the risk of hikes. We see at least three conditions for the Fed to hike: a stable labor market (u-rate <4.5%), further increases in core inflation (core PCE > 3.2%) and Powell as Chair,": BofA notes.

"These conditions are most likely to be met if the Iran shock is sustained but moderate. This "sweet spot" for hikes is likely within the $80-100 range on WTI," BofA adds.

• Shares of gold miners fall, tracking lower prices of the yellow metal [GOL/]

• Spot gold falls 1.8% to $4,566.26 per ounce

• Gold prices fall as the dollar strengthens after reports that the U.S. will deploy thousands of additional troops in the Middle East, further fanning concerns of higher oil prices, inflation, and with it, elevated interest rates

• Top miners Newmont and Barrick Mining down ~3% and 2.6%, respectively

• South African miners also gain: Gold Fields

dips 4% and Sibanye Stillwater falls 1.2%

• Canadian miners Agnico Eagle Mines and Kinross Gold slips 3% and 3.6%, respectively
(Reporting by Dharna Bafna in Bengaluru)

ANZ Research changes its Fed call.

"We are pushing back the timing of when the Federal Open Market Committee (FOMC) will resume cutting interest rates to September this year from June.

We maintain our view that the FOMC will cut rates by an additional 75bp in this protracted easing cycle," ANZ notes.

"We have pencilled in one 25bp cut each in Q3 and Q4 2026 and in Q1 2027," ANZ adds.