• Cable bounce running out of steam as 200-hour MAs (1.3340/52) cap

• With no clear-descalation path, low conviction on the topside will likely persist

• Until geo noise fades, backdrop will continue to favour USD

• Consequently, reprieves in cable are likely to remain a fleeting one

• Central bank risk also keeping traders sidelined with Fed-BoE due Wed-Thu

• BoE f/c to hold but rhetoric matters - strong hawkish lean may be GBP negative

• Meanwhile, EUR/GBP finding support can also act as a lid on the upside for cable
gbpusd hourly chart


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

Morgan Stanley Research previews the March ECB policy meeting on Thursday.

"We expect the ECB to remain on hold. The statement will likely reference the exceptionally high uncertainty but will remain broadly unchanged," MS notes.

"The press conference will be in focus, with President Lagarde likely reiterating that the ECB is coming from a good starting point and ready to act if needed. Updated projections will likely show inflation above target in 2026 but below in 2027," MS adds.

By Justin McQueen

March 17 (Reuters) - Heading into Wednesday’s Bank of Canada policy decision, the data backdrop has leaned against CAD. Both jobs and CPI came in soft, which raises the question whether the hawkish repricing post-Iran war looks somewhat stretched.

The BoC is expected to stand pat on policy, so all the focus will be on the statement and guidance. Since the Iran war broke out, we have seen a meaningful hawkish shift with year-end pricing having swung from -5bps to 30bps of tightening. But given where the data is sitting, the bar to a hawkish surprise looks elevated. Headline inflation is near cycle lows at 1.8%, and the BoC’s preferred core measures – 3-month annualised trimmed and median CPI – are tracking at 0.7-1.3%. Thus, there is little need for urgency from the BoC. Instead, sitting on their hands looks like the best path for now.

On the currency, CAD has held up reasonably well, with its low beta to a strong USD and terms of trade status – net energy exporter – having both provided a buffer. However, the cracks may be emerging. Domestic data is softening, and with USMCA renegotiations looming later in the year, the trade backdrop is likely to be a growth drag. Therefore, risks are increasingly leaning towards CAD weakness.

Technically speaking, range tops at 1.3740/50 are the near-term focus for USD/CAD. A clean break there opens up a run towards the 200-day MA cluster at 1.3800. Any hawkish disappointment stemming from the BoC decision could be enough to take the pair through these near-term hurdles.
BoC pricing


Canadian CPI


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

Bank of America Global Research previews the March FOMC meeting on Wednesday and expects the Fed to stay on hold & adopt a "wait & see" approach given the oil shock.

"Statement: expect inclusion of line: "uncertainty about the economic outlook has increased due to the conflict in Iran". Other changes minimal.

SEP: higher headline and core inflation expected. Median dots for '26-'28 likely steady. Longer-run median dot likely to tick up, especially if longer-run growth also bumped up," BofA notes.

"Press conf: Powell likely to flag stagflation risk, while emphasizing wait-and-see. Key will be if he tries to reset market concern that higher oil is unambiguously hawkish.

USD: March FOMC unlikely to be pivotal, USD upside risks will remain with oil focus," BofA adds.

Goldman Sachs Research revises its EUR/USD forecasts lower.

"Our benchmarking exercises point to the moves in key European crosses as mostly consistent with shifting equity and energy prices so far this month. In that vein, we think the recent price action has room to extend over the next few months, before many of the pre-existing macro and valuation themes can return to the fore, and we adjust our forecasts to reflect this balance," GS notes.

"We revise our EUR/USD forecast path to 1.14, 1.18, 1.20 in 3, 6, and 12 months (from 1.18, 1.20, 1.25 previously), and make similar adjustments to the Euro’s satellites," GS adds.

(Corrects to hike in first bullet)

• AUD/USD rallied to 0.7095 after the RBA hiked & markets pricing in another hike by Aug.

• Pair then pulled back with soured risk due to the conflict with Iran rallying oil

• Stocks , gold fell while USD/CNH traded positive to reinforce risk-off

• AUD/USD opened NY near 0.7080, traded up +0.20% in early action

• Rising daily RSI, move above 10- & 21-DMAs gives daily techs a bullish lean

• Monthly doji candle, falling monthly RSI are concerns for AUD/USD bulls
audusd


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

• ZEW -0.5 in March far below the 39.0 forecast

• Result way under the worst of 25 forecasts that spanned 30-54.5

• EUR/USD around 1.1510-15 before and after the release

• Marginal improvement for current conditions from -65.9 to -62.9

• The determination to gamble in FX markets could result in greater volatility

•
ZEW survey


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

Rising demand for USD/JPY options with strikes above 160.00 suggests traders now see the intervention danger zone shifting higher from the old 159.00–160.00 range. And there’s a specific FX option contract that those wary of intervention can lean on — not just as a hedge, but as a real-time barometer of whether sentiment around the threat is starting to build.

Risk reversal options will show an implied volatility premium for strikes on whichever side of a currency pair that traders expect to generate the most volatility, versus a discount in the other.

Expiry dates shorter than 1-month are the most likely to react to any changes in sentiment. USD/JPY risk reversals typically hold a premium for JPY calls versus a discount for JPY puts: downside-over-upside strikes.

A risk reversal buyer of JPY calls would therefore profit if USD/JPY were to drop and implied volatility increase, as they could sell the downside strike for a profit and buy back the topside strike they sold against it at a discount.

One-week and one-month expiry USD/JPY 25-delta risk reversals have seen that long-standing downside-over-upside strike premium almost completely erased, dropping to the lowest levels since October.

It's worth noting that these JPY call-overput premiums were edging higher in January, when traders were nervous about intervention and before USD/JPY dropped sharply from levels close to the prior intervention zone above 159.00 down to 152.00 between January 23-27.

That tumble boosted the JPY call-over-put premium on 1-month risk reversals to 2.5, clearly rewarding holders.

The aforementioned 160+ JPY put strike demand has been weighing on these JPY call-over-put risk reversal premiums. But even so, they should still pick up - even marginally - if the imminent threat of actual JPY-buying intervention was perceived to have increased.
1-week and 1-month expiry USD/JPY FXO implied volatility


1-week and 1-month expiry USD/JPY 25 delta risk reversals

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

• AUD/USD fell to 0.7050 on RBA's knife-edge 5-4 vote to raise rates at 0330 GMT

• Ensuing rise to 0.7089 spurred by hawkish Bullock guidance at press conference

• Bullock said all RBA board members agreed further tightening was necessary

• 0.7089 is three pips shy of Friday's high (0.6985-0.7082 was Monday's range)

• Two-day Fed meeting gets underway later: rate hold expected on Wednesday

• Australia, European Union signal progress in trade negotiations

AUDUSD


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

• Cable has traded a 44.5 pip range thus far Tuesday; 1.3274 = intra-day low

• 1.3274 is also the low water-mark since Monday's high of 1.3339

• Ascent to 1.3339 was influenced by lower oil prices - which weighed on USD

• 1.3339 is former support point (Thursday low). 1.3220 was 14-week low Friday

• Iran's $200 oil threat isn't that far-fetched (Brent is currently around $103)

• Two-day Fed meeting gets underway later. BoE event risk Thursday

GBPUSD


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

• FX options were primed for AUD/USD volatility from knife-ege RBA announcement Tuesday

• RBA hiked and subsequent volatility was more limited as market mostly expected this outcome

• Implied volatility consequently eased but losses limited - 1-month 11.05 to 10.85 and then 10.95

• Like other currency pairs - AUD/USD options wary of headline risk, prolonged war, economic damage

• This back-drop is expected to limit overall option price setbacks, especially for USD call strikes

• USD calls/AUD put premiums are shown via risk reversals - off highs but far from recent lows

• Related - FX options wrap - RBA/Cen-Bank alert trumps conflict volatility
AUD/USD FXO implied volatility


AUD/USD 25 delta risk reversals


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

• USD/JPY 159.08-46 EBS in Asia, easy open but downside limited, bounce later

• Hawkish BOJ Ueda talk, MOF Katayama threat of FX action help limit upside

• Eyes remain on crude oil prices, off yesterday but some bounce since

• Despite some tankers passing through Hormuz Strait, tensions still high

• USD/JPY for now holding in tapering, 159.16-44 hourly Ichimoku cloud

• Ascending 100-HMA 159.12 just below, 158.48 200-HMA underlining support

• Massive $2.2 bln in option expiries today between 158.00-60 also supportive

• Some expiries ahead with $513 mln between 159.00-10

• EUR/JPY 182.95-183.21 EBS and up from 181.97 low yesterday

• Underlying support from ascending 100-DMA at 182.26

• Near 182.70-183.11 descending hourly Ichimoku cloud, 183.21 100-HMA cap?

• GBP/JPY 211.61-212.13, looks to break above 210.06-212.38 hourly cloud

• AUD/JPY 112.32-94, mostly on hold into RBA policy announcement

• Related comment , also , on off'l talk
USD/JPY hourly:


EUR/JPY hourly:

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

• AUD/USD -0.1% after RBA hikes OCR 25 bps to 4.10% as widely expected

• Vote split 5-4, tentative decision implies dovish hike by definition

• First central bank to tighten as global energy crisis stokes inflation

• AU & EU close to signing long-awaited free trade agreement

• Oil prices rising again as supply fears resurface, Brent futures +2.6%

• Trump trying to coerce countries into helping with Strait of Hormuz blockage

• FOMC meeting outcome Wed, expected to leave FFR unchanged at 3.50-3.75%

• Range Asia 0.7055-95, support 0.6944 0.6900, resistance 0.7282 0.7661
AUD Hourly Bollinger Study

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

• Siren Gold rises 2.2% to A$0.092; set for strongest session since March 10

• Gold and antimony explorer says gold mineralisation confirmed outside main zone at Sams Creek project in New Zealand

• About 361,699 shares traded, 1.1x the 30-day average

• YTD, SNG down 3.2%

(Reporting by Sherin Sunny in Bengaluru)

• BOJ Gov Ueda in Diet testimony - Inflation accelerating, towards 2% target

• Policy will be guided accordingly, 2% likely confirmed by H2 '26, into 2027

• With inflation heading towards target as per BOJ's outlook, hike in cards

• Market still eyeing hike come April, Totan Research/ICAP odds at 57%

• Earlier, FinMin Katayama reiterated readiness to respond to "FX volatility"

• This official-talk this morning looks to help cap USD/JPY for now

• USD/JPY in 159.08-34 EBS range so far, downside limited as well however

• Spec bids tipped at and below ascending 100-HMA at 159.08

• See , , for more click on [FXBUZ]

USD/JPY hourly:


Japan's inflation over the last 5 years:

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

• AUD/USD -0.1% Tue as markets await RBA meeting outcome due 0330 GMT

• With 25 bps hike expected, focus on accompanying statement/press conference

• Hawkish guidance would potentially spur challenge of Mar 11 0.71875 high

• Trump wants countries to help with Strait of Hormuz mess that he created

• FOMC meeting outcome Wed, expected to leave FFR unchanged at 3.50-3.75%

• Range Asia 0.70625-725, support 0.6944 0.6900, resistance 0.7282 0.7661
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• Crude oil moves still major focus, off overnight, helped in USD pull-back

• Fresh jaw-boning by Japan FinMin Katayama this morning on FX moves too

• USD/JPY off some to 159.08-24 EBS range so far, high Friday 159.75

• Crude oil futures up some since NYMEX close but in very thin trading

• Tech-wise, USD/JPY holding near base of 159.16-50 hourly Ichimoku cloud

• Hourly tenkan 159.12, kijun 159.28, ascending 100-HMA 159.08, bids below?

• Moves below 100-HMA have seen bids return since yesterday

• JGB-US Tsy rate differentials in flux, shorts tad wide, longs narrower again

• In options, massive $2.2 bln expiries today 158.00-60, 159.00-10 $513 mln

• Markets hunkering down already for central bank announcements this week

• Related comments , , ,

• And , also , on Fed/CBs ,

• US markets , , ,

• And , on US economy , Katayama-speak
USD/JPY:


USD/JPY nearby option expiries this week:


NYMEX crude oil futures:

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

• NZD/USD +1.3% from Mon 0.57805 low as DXY softens on slight sentiment uplift

• Oil drifts from highs as markets interpret Hormuz ship movements as positive

• Trump upset by other countries refusal to assist with Strait of Hormuz plan

• FOMC meeting outcome Wed, expected to leave FFR unchanged at 3.50-3.75%

• NZ Feb food price index -0.1%, prior +2.1% (corrected from 2.5% published)

• Range NZ 0.5850-69, support 0.5710 0.5580, resistance 0.6092 0.6120
NZD Daily 55-DMA


DXY Daily 55-DMA

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

MUFG Research previews the RBA March policy meeting on Tuesday.

'The RBA is expected to be the first G10 central bank to respond to the energy price shock by raising interest rates this week. Currently, markets are pricing in around 17 basis points of tightening for this week and nearly three rate hikes in total by year end," MUFG notes.

"For the RBA to reinforce this hawkish repricing, it would likely need to both raise rates and deliver a strong signal that further hikes are on the way. The AUD has benefited from rising domestic yields and higher commodity prices so far this year, making it one of the best‑performing G10 currencies alongside the NOK.

"The main risk to the AUD’s bullish trend would be a further intensification of the oil price shock, which could trigger a sharper slowdown in global growth and a deeper sell‑off in risk assets," MUFG adds.

• AUD/USD +1.2% from Mon 0.6985 low with focus on RBA & easing risk aversion

• RBA meeting outcome 0330 GMT, 25 bps hike expected, dialogue critical

• AUD well supported 0.6945-50 region, hawkish RBA may spur next leg higher

• Trump upset by other countries refusal to assist with Strait of Hormuz plan

• FOMC meeting outcome Wed, expected to leave FFR unchanged at 3.50-3.75%

• Overnight range 0.7006-82, support 0.6944 0.6900, resistance 0.7282 0.7661
AUD Daily 55-DMA

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

The dollar index eased back from a nine-month high on Monday, tracking oil lower amid President Donald Trump’s calls to help unblock the Strait of Hormuz, limited tanker traffic, and talk of potential emergency reserve releases to curb energy prices.

Risk sentiment improved on comments from Trump that Iran may want a deal, Israel offering a planned timeline for continued fighting and positive Chinese economic data earlier. Trump added that it is unclear who is speaking for Iran and that Iranian opposition groups are in a tough position. Crude slipped to session lows after Treasury Secretary Scott Bessent said the U.S. is comfortable, for now, with some Iranian, Indian and Chinese vessels transiting the Strait of Hormuz, while the IEA signaled member states could release additional oil if needed. On Trump's request for nations to help reopen the Strait of Hormuz, he said French President Emmanuel Macron was willing to help.

Trump said he had spoken to French President Emmanuel Macron, who he said was willing to help unblock the Strait of Hormuz. German Chancellor Friedrich Merz said that Germany would not participate in the U.S.-Israeli war against Iran. European Commission President Ursula von der Leyen said Europe's response to disruption to oil and gas and spikes in energy prices in the Middle East must be temporary and targeted. Israel said it had detailed plans for at least three more weeks of war. Iranian Foreign Minister Abbas Araqchi said some neighboring states hosting U.S. forces and enabling attacks on Iran were encouraging the killing of Iranians. Envoys from President Trump’s “Board of Peace” met Hamas representatives in Cairo to try to preserve the Gaza ceasefire, sources said. The FOMC and other central banks, including the Reserve Bank of Australia on Tuesday, meet this week to gauge whether the Iran conflict risks weaker growth, higher inflation, or both. The White House said Trump's meeting with Chinese President Xi Jinping could be postponed due to the Iran conflict.

EUR/USD rose above 1.15 and held near its session high as risk sentiment improved, with daily RSI divergence at a seven-month low remaining a concern for bears.

GBP/USD reversed most of Friday's loss, supported by lower oil prices, improved risk sentiment, and firmer UK gilts before this week’s Bank of England policy meeting.

AUD/USD climbed on a softer dollar, firmer CNH and rising equities, pushing above its 21-day moving average at 0.7071 ahead of a possible RBA hike and press conference.

USD/JPY pared losses after hitting a fresh session low at 158.86 on weaker oil prices, with attention turning to the Fed and BOJ meetings later this week and Prime Minister Sanae Takaichi's meeting with Trump.

Treasury yields were down 5 to 7 basis points. The 2s-10s curve slipped 1 basis point to +54.0bp.

The S&P 500 rose 1.13%.

WTI oil fell nearly 5% though remained above $90/bbl.

Gold was flat while copper rose 1.2%.

Heading toward the close: EUR/USD +0.90%, USD/JPY -0.48%, GBP/USD +0.81%, AUD/USD +1.36%, DXY -0.67%, EUR/JPY +0.41%, GBP/JPY +0.35%, AUD/JPY +0.86%.(Editing by Burton Frierson Reporting by Robert Fullem)

• NY opened near 0.7050 after 0.6985 traded overnight, rally extended in NY

• US yield drop sank the US$, USD/CNH fell toward 6.8860, stocks rallied

• AUD/USD pierced the 10-DMA then neared the 21-DMA, the pair traded 0.7076

• US$ then firmed a bit while gold & silver continued to trade down, AUD/USD pulled back

• AUD/USD neared 0.7055, the pair traded up +1.09% late in the session

• Daily RSI is rising but the pair remains below the 10- & 21-DMAs

• Falling monthly RSI, monthly doji candle are likely concerns for AUD/USD bulls

• RBA rate decosion looms, hike expected, press conference will be key
audusd


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

Morgan Stanley Research previews the FOMC March meeting on Wednesday.

"We expect the Fed to stay on hold in March as it debates the outlook, including the degree to which employment has stabilized, the risk higher oil prices pose for inflation and activity, and the appropriate path for monetary policy," MS notes.

"We expect the "dot plot" to continue to call for one rate cut this year and next, despite upward revisions to headline inflation from the recent rise in oil prices. This would be consistent with past practice of "looking through" oil-induced increases in headline inflation," MS adds.

• EUR/GBP hovers above key support at 0.8600 after March flush out

• RSI bull divergence flags downside exhaustion

• Cross in consolidation mode with EUR and GBP event risk keep a lid on conviction

• Hold above 0.8600 keeps door open for a reprieve. Sub-0.86 would flip the view

• De-escalation signs in Middle East would help underpin - headline risk remains

• Topside resistance stands at 0.8660/88 - 200DMA cluster

• While dip buyers are in control above 0.86
EURGBP daily chart


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