• Cable falls to 1.3427 as safe-haven dollar strengthens on news from Iran

• Iran is stopping message exchanges with U.S. through mediator, agency says

• 1.3427 is intra-day low (1.3409 was Friday low). 1.3475 was Ldn am high

• Government bond yields rise on Iran news; 2-year gilt yield up 8 bps on day

• BoE is watching public-sector pay for inflation risk, governor Bailey says

• Burnham remains the odds-on favourite to be UK Labour Party's next leader

GBPUSD


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

Bank of America Global Research discusses the USD Index (DXY) technical outlook and flags the 98.93. level as a critical support that needs to hold for a move towards 100.38 ahead of 103.

"After filling the bearish April 7 gap caused by the US-Iran ceasefire, markets initially faded the DXY back toward the 50-day SMA now at 98.93. Ideally this holds to form a higher low and shift focus to weekly neckline resistance at 100.38, then the top of the year-long range at 100.64. A breakout above these levels would confirm a weekly base in favor of upside toward 103," BofA notes.

"However, the DXY's weak close on May 28 suggests another test of the 200-day SMA at 98.59 is possible. A hold and turn higher from there would still preserve a higher low versus early May and sustain the near-term uptrend. A close below 98.59 would weaken the bullish setup. The 61.8% Fibonacci retracement at 97.50 remains critical support to preserve the bullish base case for DXY," BofA adds.

Goldman Sachs Research likes short AUD/NZD exposure around current levels.

"While our economists pulled forward their expectation for RBNZ hikes and now expect two hikes year in July and September (prior +25bp hikes in Dec26/Feb27/May27), they recently shifted their call for the RBA in the opposite direction, pushing back their call for a final 25bp hike from June to August. On the data front, Australia data has broadly disappointed," GS notes.

"With Australia-New Zealand rate differentials showing signs of having peaked, more hikes priced for the RBNZ this year than any other G10 central bank, stretched positioning, and NZD well positioned to benefit from "de-escalation", we think the impetus for a more meaningful correction lower in the cross is building. Clarity on a normalization in global energy flows would apply clear pressure in that direction, but at this juncture we think risk-reward in short AUD/NZD is appealing from a relative data and policy perspective," GS adds.

• Cable has traded an 18.5 pip range since the London open; 1.3457 is session low

• Resistance levels include 1.3485 (Friday's three-day high) and 1.35

• BoE is expected to keep its policy rate at 3.75% this month (June 18)

• June 18 is also the Makerfield by-election date: Labour's Burnham vs Reform

• BP sells 5% stake in Australian Browse LNG project to South Korea's GS Energy

• U.S. May ISM manufacturing index due at 1400 GMT; 53.0 expected (Reuters poll)

GBPUSD


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

June 1 (Reuters) - Gold is approaching a key technical test as the January rally to a record high continues to unwind.

The metal has started June on the back foot after posting three consecutive monthly bearish closes. From a technical standpoint, the pullback from January's all-time high at $5,593.50 is now pressuring an important support point.

The 10-month moving average, which has provided closing-basis support since September 2023, is once again under threat after being tested in both March and May. That average is currently at $4,490.00. A decisive break below it, particularly on a monthly closing basis, would strengthen the bearish case and shift focus toward the March spike low at $4,099.00.

Macro headwinds have also turned less supportive. A firmer U.S. dollar and higher oil prices have both weighed on gold, while geopolitical uncertainty has kept investors cautious.

Markets are awaiting U.S. President Donald Trump's decision on a possible agreement to extend the ceasefire with Iran, adding another layer of near-term event risk. The broader geopolitical backdrop remains tense. The U.S. said it struck Iranian military sites over the weekend, while Iran's Revolutionary Guards said on Monday they had targeted a U.S. base in response, marking the latest escalation amid negotiations aimed at ending the three-month conflict. Elsewhere, Israeli Prime Minister Benjamin Netanyahu has ordered troops to advance further into Lebanon in operations against Iran-backed Hezbollah, despite a ceasefire announced more than six weeks ago.

Taken together, a negative macro backdrop and deteriorating technical structure suggest gold could remain under pressure through June, unless there is a meaningful easing of Middle East tensions.
Gold monthly chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own; Editing by Alexander Smith)

• An internal model shows USD/JPY should be trading on the 160 handle

• However, spot remains below 160 in part due to yen intervention worries

• USD/JPY has seen a modest 159.30-159.50 range on Monday, on the EBS

• Spot continues to trade above the daily cloud, that currently spans the 156.52-158.87 region

• That shows USD/JPY's technical bias remains squarely on the upside

• 30-day log correlation between USD/JPY and EUR/JPY is above +0.5 (pairs moving in tandem)

• BOJ Governor Ueda's upcoming speech is eyed for rate hike signals

Daily Chart


Correlation Chart


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

• AUD/USD has traded a 21 pip range thus far Monday; 0.7169-0.7190

• 0.7190 is 10 pips shy of Friday's two-week peak. Thursday's low was 0.7098

• Risk-sensitive AUD benefits from Nikkei topping 67k for first time

• There is a large 0.7200 option expiry for the 10am ET NY cut

• CFTC data: net AUD long fell 29% from 13-year high to 60,155 in week to May 26

• 60,155 contracts is the smallest net AUD long position for 10 weeks

AUDUSD


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

(Fixed date on 1st line)

• FX options expire at 10am New York/15:00 GMT on Monday - June 1

• EUR/USD: 1.1400 (782M), 1.1625 (485M), 1.1650-55 (770M), 1.1660 (992M), 1.1700 (1.6B)

• EUR/USD: 1.1740-45 (1.1B), 1.1975 (919M), 1.2050 (607M), 1.2070-75 (1.0B), 1.2280-85 (621M)

• USD/JPY: 154.50-65 (633M), 155.00 (715M), 156.33-35 (743M), 156.50-55 (925M)

• USD/JPY: 157.00-05 (451M), 157.50-55 (439M), 159.25 (587M), 159.27 (650M), 162.10-20 (450M)

• GBP/USD: 1.3150 (631M), 1.3425-30 (724M), 1.3450 (679M), 1.3505-10 (612M)

• USD/CAD: 1.3450 (480M), 1.3700 (454M), 1.3790-95 (1.0B)

• AUD/USD: 0.7200 (725M), 0.7350 (498M), 0.7550 (420M)

• USD/CHF: 0.7400 (510M), 0.7825 (599M)

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

• Cable rises to 1.3475 after Trump says Iran really wants to make a deal with U.S.

• 1.3475 is 10 pips shy of Friday's high. 1.35 is a resistance level beyond 1.3485

• Asian session low was 1.3445 (before Trump's Truth Social post on Iran)

• UK house prices fall for first time since start of Iran war, Nationwide says

• On Friday, Bailey said Bank of England has time to gauge impact of Iran war

• Powell warns that politicizing the Fed would cost public trust

GBPUSD


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

• Australian gold stocks in focus after UBS warns of potential FY27 earnings downgrades across the sector

• Gold sub-index up as much as 2% at 16,612.9 earlier in the session, but currently trading higher by 0.5%

• UBS says softer gold prices and rising costs could drive 5%–20% downside to FY27 EPS estimates

• Flags margin compression risk as elevated cost bases likely to persist into FY27

• Recommends shift toward higher-quality, defensive names such as Newmont and Evolution Mining

• Says weaker spot gold prices combined with inflation-driven cost pressures pose near-term headwinds

• Notes market may be underestimating cost and capex pressures, with UBS above consensus on both

• AXGD down 13% so far this year, including the day's moves

(Reporting by Roushni Nair in Bengaluru)

• AUD/USD flat Mon, Middle East peace prospects increasingly frayed

• Reports of fresh strikes from both U.S. and Iranian forces

• Israel's escalation of hostilities in Lebanon further undermines situation

• AUD upswing looks fragile, pair may fade from Fri's 0.7200 high

• AU Q1 current account due Tue, Reuters poll consensus 23.0 bln deficit

• RBA officials Bullock & Kent to appear before Senate Committee Wed

• Range Asia 0.7169-875, support 0.7080 0.6834, resistance 0.7200 0.7283
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• GBP/USD down 0.1% in Asia on elusive Iran deal, Lebanon conflict escalation

• Trump yet to approve proposed deal though markets remain optimistic

• Iran's top negotiator Qalibaf says no U.S. deal without tangible results

• Netanyahu orders deeper Israeli incursion into Lebanon to hit Hezbollah

• WTI crude +2.9% on Lebanon news after 9.5% drop last week, undermines GBP

• BoE Governor Bailey's less hawkish comments Friday also weigh on GBP

• Support 1.3400-05, 1.3370-75, resistance 1.3470, 1.3490-1.3500

• Friday range 1.3409-1.3485, Asia 1.3445-1.3459
UK payrolls:

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

• AUD/USD flat Mon in subdued trading amid ongoing U.S.-Iran stalemate

• Peace deal progress unclear despite repeated U.S. claims late last week

• Israel's escalation of hostilities in Lebanon further clouds situation

• AUD buoyancy may fade ahead 0.7200 without genuine Middle East progress

• AU May S&P manufacturing PMI 50.7 (prior 50.2), showing improvement

• AU Q1 current account due Tue, Reuters poll consensus 23.0 bln deficit

• RBA officials Bullock & Kent to appear before Senate Committee Wed

• Range Asia 0.7169-855, support 0.7080 0.6834, resistance 0.7200 0.7283
AUD Daily 55-DMA

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

• USD/JPY 159.30-43 EBS, in familiar place, dip-demand, intervention threat

• Buyers including Japanese importers, foreign stock buyers hedging, specs

• Upside limited on continuing Japanese FX intervention risk

• Some talk of stealth intervention but dismissed, not backed-up by data

• Spot holding for now above 156.52-158.87 daily Ichimoku cloud

• Mostly above 159.24-32 hourly Ichimoku cloud, 159.31 ascending 100-HMA

• 200-HMA below cloud at 159.15

• $1.6 bln in option expiries today between 159.00-30 supportive

• JGB-US Treasury short-end yield diffs still wide, long-end diffs narrow

• Little new on Middle East, US-Iran impasse continuing

• Off Friday, crude oil prices up early Asia ,

• Wall Street rally Friday seen supportive of Japanese, other equities

• Related comments , , , also

• US markets , , ,

• On BOJ , Fed , Bessent-speak

• On US-Iran , for more click on [FXBUZ]

USD/JPY:

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

• NZD/USD softens slightly Mon, but remains +2.6% from May 27 0.5835 low

• Major 0.5990-95 resistance zone tested Fri but remains unbroken thus far

• Hawkish rhetoric post-RBNZ monetary policy meeting fuels ongoing momentum

• Israel's escalation of hostilities in Lebanon puts Middle East peace at risk

• Softer CN export demand causes concern, CN May NBS manufacturing PMI 50.0

• Range NZ 0.5984-86, support 0.5815 0.5680, resistance 0.5990-95 0.6012
NZD Daily 200-DMA

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

• AUD/USD -0.1% from Fri's 0.71821 close on CN data & Middle East concerns

• CN May NBS manufacturing PMI 50.0 (prior 50.3) amid weaker export demand

• Israel escalating conflict in Lebanon puts Iran peace deal progress at risk

• AU Q1 current account due Tue, Reuters poll consensus 23.0 bln deficit

• RBA officials Bullock & Kent to appear before Senate Committee Wed

• Range Asia 0.7169-785, support 0.7080 0.6834, resistance 0.7200 0.7283
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

The dollar weakened slightly on Friday as markets appeared cautiously optimistic that a proposed ceasefire agreement with Iran could help end disruptions to energy markets and remove pressure on the global economy. Uncertainties remained, however, as Iran said it was looking for actions, not words from the United States after sources had said President Donald Trump was weighing an initial U.S.-Iranian agreement to extend a ceasefire and open the Strait of Hormuz. A senior Iranian source told Reuters on Friday a political understanding has been reached between Iran and the United States over the Iran war, but it has not yet been finalized, and that U.S. Donald Trump's claim that uranium would be unearthed by the U.S. was not true.

Chicago PMI came in at 62.7, above the consensus forecast of 50.5 and marking a sharp recovery from the previous reading of 49.2.

Fed officials continued to signal the U.S. central bank may need to raise interest rates in the future if the war in the Middle East leads to a persistent increase in already-high inflation. Philadelphia Fed President Anna Paulson said it was healthy for markets to weigh the possibility of a tighter policy outlook. Fed Vice Chair for Supervision Michelle Bowman said the Middle East war's impact on the economy, while still being measured, could lead to persistent rises in inflation that might require tighter monetary policy. Kansas City Fed President Jeffrey Schmid said that already-hot levels of inflation make it harder to assume the current energy shock will have only a temporary impact on pricing and can be ignored by the central bank. Minneapolis Fed President Neel Kashkari said that April inflation data raised the need to pay attention to inflation risk more closely.

Treasury yields fell 2-3 bps at the front end and belly of the curve but were little changed further out. The 2s-10s curve steepened 1.21bps.

The S&P 500 was trading 0.25% higher in New York afternoon after extending its record run, as Dell results drove tech shares higher.

WTI crude oil was down 1.73% and on track for its steepest weekly decline since early April, helped by anticipation of a ceasefire extension.

Copper was down 0.61% while gold rose 1.51%.

Heading toward the close: EUR/USD +0.09%, USD/JPY +0.03%, GBP/USD +0.11%, AUD/USD +0.32%, DXY -0.11%, EUR/JPY +0.13%, GBP/JPY +0.11%, AUD/JPY +0.31%.(Burton Frierson)

• NY opened near 0.7155 after AUD/USD traded 0.7150 in Europe's morning

• Rally ensued on report Pres. Trump to make determination on deal with Iran

• USD, US yields fell & USD/CNH hit a fresh 3-1/4-year low of 6.7605

• Gold, silver and copper moved upward while stocks hit new all-time highs

• AUD/USD rallied above the 21-DMA, hit 0.7200 then neared 0.7185, was up +0.32% late

• May's monthly doji indicates either pause in long-term rally or reversal

• Widening Bollinger bands indicates rally could resume however
audusd


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

JP Morgan Research discusses Gold technical analysis.

"Gold has fallen to challenge the upper end of the 4200-4400 support zone we've believed would define the lower end of the 1H26 trading range. This zone includes the 200-day moving average. We are looking for the market to base in that area, and we continue to believe the multi-month range marks consolidation within a longer-term bull trend, as opposed to the formation of a longer term bearish trend reversal," JPM notes.

"If our view is incorrect and the market breaks below that and other support close to 4000, it would mark a major game changer for the longer-term trend, which again form a bottom pattern in that support zone...," JPM adds.

• USD/JPY grinding in a narrow 158.98-159.38 range - market caution remains ahead of 160

• MoF confirms Apr-May intervention at JPY 11.73trillion

• Bigger than both Apr-May (JPY 9.79trillion) and Jul 2024 (JPY 5.53trillion) respectively

• 160 effectively a hard cap for now

• Risk-reward for longs deteriorates sharply the closer spot is to 160

• Downside cushioned by cloud support (156.52-158.87) - keeping dips shallow

• Net-net: the sideways drift should persist
JPY performance after intervention


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

Bank of America Global Research expects the USD to stay bid into the Summer.

"DXY has traded in a narrow range since mid-May, caught between widening rate differentials and sliding crude oil prices. Hopes of an Iran peace deal have no doubt played a role in declining energy costs but we remain cautious on oil prices even if negotiators secure a near-term deal to resume passage through the Strait. The relative stability in crude oil prices over the past few months is at least partly a function of subdued Chinese import demand, in our view. Any full or partial reopening of the Strait would be met with a surge in demand for strategic oil barrels, a process that we see extending for about 18-24 months," BofA notes.

"Next week's non-farm payrolls data and Fed beige book release are potential catalysts for DXY to break out of its recent range and we continue to like EUR/USD put spreads. ADP private payrolls, jobless claims and BofA's employment report for April 2026 suggest labor demand remains robust. Despite a slight miss on inflation and spending data this week, consumer spending also remains robust. Notwithstanding a modest headwind from month-end rebalancing flows, we also see a seasonal tailwind for the dollar (vs. CNY) as we enter dividend payment season for Hong Kong-listed Chinese companies," BofA adds.

Sterling is likely to remain confined to near-term ranges as repeated failures by bears to sustain momentum below the psychological 1.3400 threshold and bulls' inability to take out resistance above 1.35, leave the currency lacking a clear directional catalyst. The pound edged slightly lower following less-hawkish commentary from Bank of England Governor Andrew Bailey, who signaled that policymakers feel no immediate urgency to raise interest rates. Tempering an otherwise bearish climate for sterling is optimism over an imminent U.S.-Iran ceasefire extension, currently awaiting approval from U.S. President Donald Trump. On the data front, Thursday’s slightly below-forecast U.S. PCE price index tempered hawkish Fed policy expectations, adding a less-dollar-friendly layer to the macro backdrop, which may prod sterling bulls to recast their focus on 1.35.

From a positioning standpoint, today's upcoming IMM positioning data is anticipated to reveal a decrease in GBP short bets. This aligns with the pound's 0.35% rise in the recently closed reporting period and the broader trend of reduced geopolitical and domestic UK risks, which had previously fueled significant sterling selling versus the dollar.

Technically, the pair is cradled by immediate support at the bruised 200-DMA of 1.3423 and recent trend lows just below 1.3380, with more significant support by the lower 30-day Bolli at 1.3352. On the upside, resistance sits at the daily cloud top by 1.3451, followed closely by 1.3481, the 50% Fib of 1.3658-1.3304 and capped by recent highs at 1.3504 and 1.3509 earlier this week.
GBP$ Chart:


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

Credit Agricole CIB Research maintains a short AUD/NZD position in spot targeting a move towards 1.16.

"The US and Iran grinding towards a deal to re-open the Strait of Hormuz is also weighing on oil prices and unwinding some of the terms of trade shift in favour of the AUD over the NZD. Importantly, even if a US-Iran accord is reached, there is a fair amount of inflation baked into the Australian and NZ economies, which both central banks will have to respond to. But the RBA is ahead of the curve, having raised rates three times already, and the RBNZ must play some catch up.

"The hawkish pivot by the RBNZ combined with softer Australian inflation is eroding the RBA-RBNZ rate divergence. Even today, NZ data pointed to bounces in business and consumer confidence in May, reducing one of the key reasons cited by internal RBNZ MPC members for resisting a rate hike this week while external members voted for a hike," CACIB notes.

"We continue to think there will be a grind lower in the Australia-NZ short-term rates differential back to its over 30Y average, bringing AUD/NZD likewise back towards its 30Y average of 1.16. The relative shift in the terms of trade advantage between Australia and NZ will also be a factor driving the exchange rate lower. We remain short AUD/NZD," CACIB adds.

ANZ Research discusses JPY outlook and the scope for anther wave of Japan's MoF intervention.

"USD/JPY is holding near 160, keeping intervention risk in play. Intervention can smooth the pace, not change the trend. A durable move in the JPY needs more credible BoJ normalisation and lower energy prices. Official rhetoric has had limited impact, and demand for upside USD/JPY protection has increased as spot approaches prior intervention levels," ANZ notes.

"Recent BoJ communication has been incrementally more hawkish, and the June meeting is now live. JPY weakness is feeding into inflation expectations, long-end JGB yields and the domestic political cost of staying too accommodative. But the macro backdrop is not yet strong enough on its own to deliver sustained JPY strength. A June hike, or a more hawkish signal from Governor Ueda, would strengthen the medium-term case for JPY. The BoJ meeting on 15–16 June is key. A hike with hawkish guidance may support a JPY rally, but this also will have to go hand in hand with energy prices moving lower reducing the negative terms of trade shock that is weighing on both the JPY and domestic fiscal spending plans," ANZ adds.