• NY opened near 1.1190 after 1.1262 traded overnight, pair's drop extended

• Rising French, Italian bond yields, USD & Us yield

gains weighed

• 1.1165 traded early in NY's morning, the drop stalled however, rally ensued

• USD, US yields, oil, USD/CNH all moved downward to help boost EUR/USD

• Gold, silver, equities lifts off their lows also contributed to lift the pair

• 1.1203 traded, EUR/UD sat near 1.1195 late, it traded down -0.57%

• Falling RSIs, widening Bolli bands, consolidation of recent drop are bear signals
eurusd

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

• NY opened near 0.6960 after 0.6984 traded overnight, pair fell in early NY

• USD, US yield , USD/CNH gains weighed, AUD/USD hit 0.6943

• The pair began lifting though as USD selling emerged & yields softened

• Upward moves in copper, gold, silver & equities also helped lift AUD/USD

• The pair sat near 0.6965 late in the day, traded down only -0.28%

• Falling daily RSI, pair's hold below the 10-DMA are concerns for bulls

• Rising monthly RSI, bull pennant on monthly charts give bulls some comfort
audusd

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

Goldman Sachs on USD/JPY trading outlook.

"This is a low quality trading environment and as a result large one-off often macro-agnostic tickets are determining paths on the day," GS notes.

"Conviction on USD/JPY shorts are lower, and we have parred back bets with the residual position watched versus the top of the cloud around 159.60 – reserve the right to re-engage, but tying up capital there is inhibiting our ability to trade some of the intra-day tactical opportunities," GS adds.

• USD/CAD holds above 1.42 and is back poking through the summer peak at 1.4248

• In turn, the uptrend remains intact but with momentum is slowing

• RSI is flashing a mild bearish divergence - signal is weak for now, but it is another hint at a rally losing steam

• Looking back, spot has rarely sustained above these levels over the past decade outside crisis episodes (2016/2020/2025)

• Though this adds to the pullback view, reversal signals remain lacking

• There is also little appetite to lean against USD as dips are still finding solid demand

• A sub-1.42 move would raise pullback risks, but a clean break above 1.43 would further underpin the trend

• That said, the pair looks to be in consolidation mode between 1.42-1.43 for now
USDCAD hourly


USDCAD weekly chart

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

MUFG Research discusses USD/JPY outlook and flags a scope for a move towards 160 on technical factors.

"Yomiuri is today reporting that the government is considering another supplementary budget to be compiled by November and passed through parliament by year-end. With the BoJ already priced for three hikes by July next year, front-end rates are unlikely to move higher on this speculation...The size of any supplementary budget will be important of course and it may well turn out to be small  but there is a risk it could feed into some renewed steepening of the JGB curve that tends to coincide with yen underperformance. Even if small in size it could still blur the lines on the government and the BoJ being in unison in fighting inflation risks," MUFG notes.

"A break of the 200-day moving average will open up the potential for renewed momentum in USD/JPY with the potential for a full retracement back to the 160-level from early in September and to levels where intervention speculation would likely resume," MUFG adds.

EUR/USD rallied sharply on Tuesday, but the pair gave back all of those gains Wednesday and now looks set to make new longer-term lows. Both yield differentials and technical indicators suggest the risks are still tilted to the downside.

In Europe, government bond yield spreads between Germany and France, Italy and Spain widened again. Investors worry that fiscal and election uncertainty in France could spread to other parts of the region, and that concern is keeping bearish sentiment toward the euro intact. The spreads may widen further because relief for French bonds looks unlikely. A senior euro zone official said there has been no contagion from French yields so far, and Bank of France head Emmanuel Moulin said France doesn't need help from the ECB.

US-German 2-year and 10-year yield spreads are widening, which increases the dollar's yield advantage over the euro. These spreads have widened sharply since early September and are holding near their recent wides, which adds to the pressure on EUR/USD.

The technical picture is also bearish. The pair is consolidating its drop from the September 25 daily high. Daily and monthly RSI readings show downward momentum, the 15-month Bollinger bands are widening, and the pair is holding below its downward-sloping 10- and 21-day moving averages.

Several support levels could be tested next: the 50% retracement of the 1.0125–1.2084 rally (about 1.1105), the May 2025 monthly low and the psychological 1.1000 level. If those supports break, the 1.0500–1.0600 range comes into focus.
eurusd

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

Morgan Stanley Research previews today's US September FOMC minutes.

"We and markets continue to decipher the new FOMC's reaction function.

The upcoming minutes may help show how patient or impatient FOMC members are for the return to target inflation, how much they've taken on oil price pressures as threatening that target, and how they're viewing the recent strengthening in growth and labor market indicators," MS notes.

ANZ Research sees a scope for NZD recovery towards 0.61 in Q4.

"We think the NZD is undervalued based on our modelling which points to a fair value of 0.61; and we maintain a positive outlook for the NZD/USD, particularly as we see the USD depreciating in the coming quarters.

Furthermore, we expect the RBNZ to hike three more times, leaving the OCR at 3.5% by March. CFTC positioning flipped net long for two weeks in mid-September, suggesting the NZD is running into buying pressure at current low levels," ANZ notes.

"Finally, the NZD enjoys a seasonal boost in Q4, particularly in December. The coming months are therefore likely to be a turning point for nominal export values for dairy and meat products, boosting corporate demand for NZD. Seasonality in risk sentiment typically plays in the NZD’s favour through the closing months of the year as well, aiding our forecast. Any easing in the conflict in the Middle East or declines in the price of oil would swing in favour of the NZD relative to the AUD or the USD," ANZ adds.

• US-listed shares of crypto-linked companies fall premarket as bitcoin touches its lowest level in a week

• Bitcoin down 2.2% to $83,710.93; Ether down 4.5% at $2,578.39

• Cryptocurrency exchange operator Coinbase Global drops 2.5%

• Crypto miners: Riot Platforms Inc and MARA Holdings fall around 2% each

• Hut 8 down 2.7% and Bit Digital marginally down

• Retail trading platform Robinhood Markets declines 2.1%

• Largest corporate holder of bitcoin Strategy slips 3.4%

• Shares of American Bitcoin , backed by two eldest sons of US President Donald Trump, eases 1.6%

• ProShares Bitcoin Strategy ETF and iShares Bitcoin Trust ETF both delines more than 2%

• Including session's moves, BTC down 4.5% YTD, ETH down 13.4% YTD

(Reporting by Darshan Kumar in Bengaluru)

• Gold's price action is worrisome for dip-buyers, where risks increasingly lean towards a clean break of $4100

• Rebound attempts have failed to be sustained, underscoring the bearish skew

• A break below $4100 opens the door to a sub-$4000 move. YTD low at $3944

• Initial resistance at $4220 (trendline from the ATH), followed by $4267 (100DMA) and $4306 (55DMA)

• Technically, a close above the 55DMA would negate the current bearish setup

• With the USD firm and UST yields showing little signs of a reversal, gold's topside remains capped

• A light data calendar means external factors should continue to drive the action

• Fed speakers remain key, with Fed Governor Waller due to speak Thursday
Gold daily chart

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

• USD/JPY has seen a 157.86-158.51 range, on Wednesday, according to EBS data

• Spot continues to hover below the daily cloud that currently spans 159.43-159.60

• Overall bias remains on the upside as USD/JPY usually climbs in October

• The 14-day momentum reading is positive, highlighting the bullish bias, 160 is vulnerable

• However, there is said to be aggressive Japanese exporter offers/sales in the 159, 160 vicinity

• While EUR/JPY has been offered recently compared to USD/JPY, positive correlation is still high

USD/JPY Chart


EUR/JPY Chart


Correlation Chart

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

(Adds charts )

• A break of huge 1.1000 option barriers/triggers could flip EUR/USD option positioning to short gamma

• Short gamma would drive downside short covering via spot and options and increase volatility

• FX options continue to hedge the risk via binary and digital options - recall HF demand led the charge last week

• Implied vol and and EUR puts eased as spot recovered mid 1.12's Tuesday but still well above prior lows

• Latest spot dip sub 1.1200 reignites demand - 1-month implied vol 6.6 - after 7.3 to 6.25 setback Mon-Tues

• 1-month 25 delta risk reversals back over 1.0 and 3-month paid 1.0-1.15 EUR puts over calls
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals

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

• Panic over for now but options still price EUR/USD downside risk; spot holds above 1.1200 after Monday's 1.1161 low

• Implied vols lower: 1-month settles 6.35 from Monday's 7.3 high since March and 1-year eases to 6.9 from 7.3

• However, current levels still high by comparison to 1-month multi year low at 4.5 in mid-September, with 1-year around 6.0

• Premium for EUR puts over calls via risk reversals is lower too - 1-month 0.95 after testing the March peak at 1.7

• However, that's still a solid downside strike risk premium when compared to a neutral directional bias in mid September

• Huge 1.1100 - 1.1000 option barriers mark the danger levels - a break below risks deeper and more disorderly declines

• Related - EUR/USD: Relief rally - sellers await
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals-

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

• EUR/USD rose to 1.1276 on Tuesday meeting target for a minor correction

• A 23.6% retrace drop from 1.1645 on Sep 9 to 1.1161 Oct 5 is 1.1277

• An oversold situation has been alleviated and pair has dropped on Weds

• On Wednesday's pair down from 1.1262 to 1.1223 EBS

• Oil has climbed around $3 pb since Weds weighing EUR/USD

• Downside target off Sep 9 high, Oct 5 low and Oct 6 recovery high is 1.1088

• *

EURUSD target


EURUSD correction

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

• FX option strikes expire at 10am New York/14:00 GMT on Wednesday Oct 7

• EUR/USD: 1.1170-80 (705M), 1.1200-05 (1BLN), 1.1240-50 (2BLN), 1.1255-60 (2.2BLN), 1.1265-70 (1.1BLN), 1.1300 (3.6BLN)

• USD/CHF: 0.8200 (200M), 0.8380 (298M). EUR/CHF: 0.9375-80 (333M)

• GBP/USD: 1.3250 (291M), 1.3275-85 (210M). EUR/GBP: 0.8460 (420M)

• AUD/USD: 0.6925-30 (394M), 0.6935-40 (1.3BLN), 0.7050 (705M)

• NZD/USD: 0.5550 (615M), 0.5700 (296M), 0.5750 (300M), 0.5775 (682M)

• USD/CAD: 1.4180 (300M), 1.4200 (377M)

• USD/JPY: 157.90-158.00 (1BLN), 158.10-20 (468M), 158.30 (361M), 158.95 (281M)

• FX options wrap - Vols take a breather as risks simmer (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Shares of BOA Resources advance as much as 25.8% to A$0.195, their highest since late April 2022

• Copper explorer says copper found in 20 of 23 drill holes reported so far at its Ricci Lee prospect in Western Australia

• Around 8.8 million shares traded, ~4.5 times the 30-day average

• YTD stock up 533.3%

(Reporting by Swetha Lakshmi)

• Rox Resources jumps nearly 9% to A$0.685, a more than five-year high

• Stock posts its biggest intraday pct rise since August 20

• Critical minerals developer reports high-grade infill drilling results at its Youanmi gold project in Western Australia

• RXL adds that the top six levels of the United North deposit are sufficiently drilled to support production planning and mine development

• Stock up 35.3% YTD, including the session moves

(Reporting by Rudrannsh Mehra in Bengaluru)

• Shares of Australia's First AU rise as much as 12.5% to A$0.180, hitting their highest level since September 24

• Stock logs its biggest intraday pct gain since September 30

• Co commences drilling at its First Hit gold mine, located within its Riveria East gold project in Western Australia

• Stock up over 20% this year, including the day's move

(Reporting by Rajasik Mukherjee in Bengaluru)

• Australian gold stocks rise as much as 2.3%, set for their best day since Sept 30

• Gold stocks rise as bullion prices gain, supported by a pause in the US Treasury yield's rally and a weaker dollar [GOL/]

• Gold miners Evolution Mining and Northern Star Resources jump 2% and 3.5%, respectively

• YTD, AXGD down more than 2%

(Reporting by Aamir Sheik Khalid in Bengaluru)

• USD/JPY buoyant and back on 158 handle, Asia so far 158.07-40 EBS

• Still towards top of recent core range between daily Ichi kijun, 200-DMA

• 200-DMA 158.52 and market seen heavy above, daily kijun flat at 156.64 below

• Daily Ichimoku cloud 159.42-59 but looking to decline, to 156.64-158.44 soon

• Potential for USD/JPY to break back above cloud

• Spot tracking away from 157.95 100-HMA, 157.62-94 hourly Ichimoku cloud

• $1.2 bln option expiries between 158.00-20 providing gravitational pull

• Also $663 mln between 158.30-60 strikes, $1.3 bln today on 157 handle

• JGB-US Treasury 2-year rate differentials off recent highs, in 10s wider

• Reflationist new BOJ Policy Board member Sato now says supports rate hikes

• Sato dissented at last BOJ meeting in favor of hold alongside newcomer Asada

• Sato thus more likely to support another BOJ hike come December

• That said, fresh Nikkei gains could again see fresh JPY currency hedging

• As to Japanese exporters, more aggressive sales seen on better bid USD/JPY

• Related comments , , , also

• US markets , , ,

• On BOJ Sato , , Fed-speak

• On US economy , for more click on [FXBUZ]

USD/JPY:


Nikkei 225:


JGB-US Treasury 10-year interest rate differential:

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

• NZD/USD +0.6% from Tue 0.5590 low, but down cumulative 6.1% since Aug 21

• Pair targets 0.5581 support, clean break would prompt slide toward 0.5845

• U.S. imports +4.3% in Aug to record high as trade deficit widens 13.7%

• U.S. equities stay upbeat ahead of Q3 earnings season starting next week

• Fed meeting minutes due Wed, DXY & UST yields softer as bond fear moderates

• RBNZ Governor Anna Breman speaks Thur, Karen Silk panel discussion Fri

• Range NZ 0.5622-28, support 0.5581 0.5485, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA

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

MUFG Research discusses EUR outlook on the back of  Spanish Snap Election on Nov-29.

"The main development in the euro-zone yesterday was the announcement from Spanish Prime Minister Pedro Sanchez that he has decided to call an early election for 29th November. It comes after parliament rejected his minority government’s housing plan last week which had fuelled speculation over a snap election. The government’s current term began in 2023 and was due to run until July 2027," MUFG notes.

"The latest opinion polls have been indicating that the centre-right People’s Party are well positioned to positioned to become the biggest party after the election although would require support from other parties without a majority. PP leader Alberto Nunez Feijoo has indicated that they could govern with the radical-right VoX party. While the snap election adds to political uncertainty in the euro- zone in the near-ter, we do not expect the outcome to materially add to downside risks for the euro," MUFG adds.

• AUD/USD +0.3% from Tue 0.6962 low in an extension of modest wtd gains

• U.S. trade deficit +13.7% in Aug, imports +4.3% to record high of $420.8 bln

• Gold +0.6%, DXY -0.3%, & UST yields lower; Fed meeting minutes due Wed

• U.S. equities stay upbeat ahead of Q3 earnings season starting next week

• AUD sellers likely to emerge ahead of 0.7054 100-DMA, 0.6865 downside target

• Overnight range 0.6962-90 support 0.6904 0.6865 0.6834, resistance 0.7282
US Trade Balance


AUD Daily 21/55/100-DMA

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

• GBP$ firm in NY afternoon, +0.36% at 1.3272; Tuesday range 1.3286-1.3202

• Bid near 1.32 since late-September intact, USD under pressure as global yields slip

• Risk rallied broadly as French fiscal concerns ebb 10-yr OAT -13bp, UK 10-yr Gilt -2bp

• UK inflation, high yields a concern ahead of UK CPI Oct 21, Autumn Budget Oct 28

• LSEG's IRPR sees BoE +22bp in Nov, total of +36bp by Dec MPC; Fed +26bp by Dec

• GBP$ res 1.3286 Tuesday high, 1.3311 daily high Sept 30, 1.3349 falling 21-DMA

• Supt 1.3238 the 10-DMA, 1.3202 Tuesday low, 1.3181 daily low Oct 1

GBP$/Glbl bonds Chart:

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