• EUR/USD risk reversals increasingly favour EUR puts over calls as USD gains broad support

• Benchmark 1-month 25-delta risk reversal at 0.45 — highest since April 13, up from 0.25 last week

• Rising risk reversals signal options market expects implied vol to climb as EUR/USD drifts lower

• That's exactly what's happening — 1-month implied vol at 5.75, up from 2026 lows of 5.35 on Thursday

• But context matters - March saw 1-month vol peak 9.0 and 1-month risk reversal reach 1.5

• Current moves signal caution, not panic — EUR/USD remains well within its longer-term ranges
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility


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

• Gold drops from $4665/oz to $4555/oz on Friday

• Follows sell signal where 55-DMA fell below 100-DMA

• USD index rises to 99.20 - highest since Apr 7

• USD index back above 55-DMA at 98.97

• 21-DMA set to rises over 100/200-DMAs - buy signal

• Apr-7-8 gap (99.52-98.92) may be filled

• EUR/USD sinks to 5-week low

• *

Gold


USD index


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

• Cable falls to 1.3335 as news of Burnham's path to Downing Street weighs on pound

• Burnham set to stand in Makerfield by-election, mooted for June

• If Burnham wins, he is expected to launch leadership challenge against PM Starmer

• July mooted as earliest month in which Burnham could replace Starmer as PM

• 1.3335 is the lowest level since April 8; dollar benefits from higher UST yields

• Six of 10 fund managers polled by FT said Burnham is "least market friendly" PM option

GBPUSD


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

• EUR/USD sinks to 1.1632 EBS its lowest since April 8

• Pair drops below 55-DMA at 1.1646

• Challenging midway point of Mar-Apr range at 1.1629

• Apr 8 low was 1.1589 and 61.8% Mar-Apr range is 1.1577

• This week's series of lower daily highs may encourage sellers

• Traders are long euro and oil has risen back to $108/pb

•
EURUSD


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

• USD/JPY holding bid in Asia as is wont pre-weekends, range 158.33-59 EBS

• Tentative moves higher but market still wary of MOF-ordered intervention

• MOF-speak conspicuous in its absence today, preparing for surprise move?

• No doubt MOF out to punish speculators, that said, real USD demand too

• Maybe less so today however with Nikkei off, less hedging interest

• Nikkei from 63,235 early high to 61,740 at TSE AM close

• But Japanese importer interest strong, 15th and pre-weekend Gotobi demand

• Technically, USD/JPY towards top of 156.37-158.92 daily Ichimoku cloud

• 100-DMA in cloud at 157.43, still pivot?

• In options, massive $1.6 bln expiries today between 158.00-20, supportive

• EUR/JPY on back-foot, 184.58-82 EBS, tracking away from 185.41 peak Tuesday

• CHF/JPY in stasis within 201.23-202.28 range since Tuesday, 201.64-202.12

• GBP/JPY heavy, 211.72-212.33, dipping into 211.08-212.06 daily Ichi cloud

• AUD/JPY backing off its 114.73 high Wednesday, Asia 114.39 to 113.86

• Japan wholesale prices surged in April, seen cementing BOJ June hike

• Latest poll shows Japan Q1 GDP likely rose 0.4% on exports

• Related comments , , also

• On Japan CGPI , for more click on [FXBUZ]

USD/JPY hourly:


Nikkei 225 hourly:

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

• EUR/USD heavy, 1.1676 early to 1.1646, in line with broad USD strength

• Deeper into its tapering, 1.1584-1.1703 daily Ichimoku cloud

• Selling from 1.1721 yesterday, hourly Ichi tenkan/kijun 1.1662/83 above

• Market may be capped today at 1.1675 on massive E1.3 bln option expiries

• More above too between 1.1740-90 total E2 bln

• Below E1.2 bln 1.1620-50 and likely supportive for now

• EUR/JPY on back-foot, 184.58-82 EBS, tracking away from 185.41 peak Tuesday

• EUR/CHF heavy, 0.9146-50 EBS, deeper into its 0.9123-68 daily Ichimoku cloud

• EUR/GBP bid and exception on UK political to-do, 0.8709-13

• Popped above its daily Ichimoku cloud yesterday, today 0.8694-0.8701, thin

• Smattering of option expiries today at 0.8650, 0.8675, 0.8700 and 0.8720

• Related comments , , ,

• And , also , for more click on [FXBUZ]

EUR/USD:


EUR/JPY:


EUR/GBP:

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

• AUD/USD -0.2% Fri as broad USD index breaks above 98.97 55-DMA in Asia

• AUD vulnerable to downside extension post-failure to break 0.7283 resistance

• U.S. inflation concerns continue to escalate; Xi warns Trump on Taiwan

• RBA's Hunter speaks Tue ahead May meeting minutes release, AU Apr jobs Thur

• U.S. initial jobless claims 211k (poll 205k), Apr retail sales +0.5%

• Range Asia 0.7201-23, support 0.7100 0.6834, resistance 0.7283 0.7661
AUD Daily 55-DMA


DXY Daily 55-DMA

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

• USD/JPY traded through anticipated line in sand of 158 for FX intervention

• Up to 158.41 EBS, Asia so far today 158.32-44 and consolidating gains

• Tokyo still wary of FX action, especially ahead of the weekend

• Good Japanese importer demand eyed, today pre-weekend Gotobi

• Specs also seen to have joined rally, hedgers too on Japanese equity buys

• USD/JPY towards top of 156.37-158.91 daily Ichimoku cloud, 100-DMA 157.43

• Widening of JGB-US Treasury 2-year rate differentials look to have peaked

• Off from 259.7 bps Wed to 256.10 bps yesterday, in 10s narrower to 183 bps

• On options front $1.6 bln in expiries today between 158.00-20 strikes

• These expiries likely supportive for now, also USD usually bid pre-weekends

• Related comments , , ,

• And , also , on US data

• US markets , , ,

• Fed-speak , , ,

• And , , for more click on [FXBUZ]

USD/JPY:

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

• NZD/USD -0.9% wtd amid darkening domestic & international economic clouds

• NZ Apr manufacturing PMI 50.5 (prior 53.2), 4th-consecutive decline post-Dec

• DXY firms as U.S. inflation concerns mount; Xi warns Trump on Taiwan

• NZD close below 0.5929 opens downside potential towards 0.5815 support

• NZ Q1 producer prices due Tue, an important read ahead May RBNZ meeting

• Range NZ 0.59075-17, support 0.5815 0.5680, resistance 0.6090-95 0.6120
NZD Daily 55-DMA


DXY Daily 55-DMA

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

• AUD/USD -0.6% from Thur 0.72643 high as broad USD index strengthens

• DXY +1.1% wtd, largely driven by escalating U.S. inflation concerns

• Reports indicate U.S./CN meeting focussed on trade and geopolitical issues

• Xi warns Trump Taiwan disagreements could push relations to dangerous place

• AUD shies away from 0.7283 resistance, vulnerable to further drift lower

• RBA's Hunter speaks Tue ahead May meeting minutes release, AU Apr jobs Thur

• U.S. initial jobless claims 211k (poll 205k), Apr retail sales +0.5%

• Overnight range 0.7217-61, support 0.7100 0.6834, resistance 0.7283 0.7661
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

Goldman Sachs Research preview the core PCE print for April which is due on May 28.

"With CPI and PPI in hand, we estimate that core PCE prices rose 0.30% in April. Our forecast implies that core PCE prices rose 3.32% year-over-year and headline PCE prices rose 0.45% in April and 3.79% year-over-year.  We estimate that trimmed mean PCE inflation was a softer 0.25% because it removes boosts from the energy price spike, tariffs, and AI mismeasurement," GS notes.

"Core CPI rose 0.38% in April, reflecting a roughly 13bp boost from an extra month’s worth of rent and owners’ equivalent rent inflation to make up for a missing month from the government shutdown last October.  Lodging, airfares, and household operations each contributed 4bp," GS adds.

• GBP$ soft in NY afternoon trading, -0.9% at 1.3400; NorAm range 1.3518-1.3399

• Labour party resignations fomenting political unrest as Starmer tenure tenuous

• Mideast tension, high oil, inflation/growth function add to UK fiscal concerns

• Today's UK gilt price action hints at diminishing fiscal angst, long yields remain elevated

• UK CPI/RPI/PPI next week may be seminal moment as inflation likely ticked higher

• GBP$ supt 1.3399 Thurs low, 1.3383 daily low April 13, 1.3322 daily cloud base

• Res 1.3483 100-DMA (fmr supt), 1.3536 Thursday high, 1.3553 falling 10-DMA

Chart:


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

• NY opened near 1.1700 after 1.1722 traded overnight, slide extended in NY

• USD buys, firmer yields , wider spreads

weighed

• Those moves ensued after April retail sales, weekly jobless claims reports

• Gold and silver turned lower and USD/CNH rallied off its session low

• EUR/USD fell below the 200-DMA & May 5 daily low, the pair traded 1.1671

• 10-session low hit, pair then bounced slightly, neared 1.1675, was down -0.31% late

• Techs lean bearish; RSIs falling, 15-mo Bollis contracting, monthly inverted hammer in place
eurusd


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

• NY opened near 0.7240 after 0.7264 traded overnight, down move extended in NY

• US yields firmed after April retail sales, weekly jobless claims reports

• Overnight USD buying intensified while gold, silver prices moved downward

• USD/CNH rallied off its 6.7817 low and neared flat on the session

• AUD/USD dipped below the 10-DMA, traded 0.7217 before bouncing slightly

• Pair lifted back above the 10-DMA, sat near 0.7225 late, was down -0.45%

• Techs lean bullish; monthly RSI rising, pair is consolidating gains off the April 29 low

• Hold above the 61.8% Fib of 0.8007-0.5910, widening Bolli bands are bull signals
audusd


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

Bank of America Global Research discusses the relation between Nikkei and the JPY.

"Since last year, equity markets have shown relative strength in the order of Japan, the US, and Europe, while FX markets have shown the reverse. In FX, concerns over central bank independence and fiscal sustainability are weighing on both JPY and USD. Structural outflows from Japan also remains a source of yen weakness," BofA notes.

"In this context, June will be critical for three reasons. (1) Whether the Strait of Hormuz reopens before materially impacting Japan's manufacturing sector. (2) Whether the Bank of Japan proceeds with a rate hike at the June meeting while reinforcing its independence. (3) Whether the government's annual policy framework (Honebuto Hoshin) can restore confidence in fiscal policy without undermining growth expectations. At present, however, the bar for all three conditions to be met looks high," BofA adds.

Sterling is expected to remain under pressure, reacting to headline-driven volatility in the near-term as markets balance technical support levels against a fracturing UK political landscape and Middle East peace ructions.

The pound traded with a slight downward bias today, last at 1.3502, moving in lockstep with a broadly stronger U.S. dollar while internal pressures keep GBP on the defensive. Confidence in Prime Minister Keir Starmer’s leadership has been further eroded by the resignation of Health Minister Wes Streeting. However, the currency has found support, for now, in the fixed-income space as retreating long-end gilt yields have alleviated some of the immediate fiscal angst that previously weighed on sterling. Technically, the pair is currently testing a thicket of support. While it dipped to a session low of 1.3495 in early NorAm trading, it remains tenuously above the psychological 1.3500 handle and the critical 100-DMA at 1.3484. Further downside protection is visible at the 200-DMA at 1.3427 though a breach of the 200-DMA would signal a more profound bearish shift toward the daily cloud base at 1.3322.

The 2022 crisis of market confidence during Liz Truss's tenure as prime minister remains fresh in the minds of many market participants, who will judge any threats to Starmer's leadership on the likelihood that any successor would loosen fiscal policy, with the gilts market serving as the main arbiter.

For now, upside potential for GBP/USD appears capped by the 10-day SMA at 1.3560 and more significantly by recent trend highs in the mid-1.36s, especially as geopolitical uncertainties and inflation expectations remain fluid.
Sterling Chart:


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

JP Morgan Research discusses the current FX valuation in G10 FX market.

"Looking at FX since the war, there aren’t many severe dislocations or misvaluations in G10 FX to exploit. We continue to receive questions about the USD’s response through out the entire conflict, with anecdotal reports suggesting that cross-market betas to oil have been fading as the conflict has dragged on (suggesting some fatigue, as well as some inherent optimistic bias that the situation will resolve before inventories hit critical levels),"JPM nbotes.

"In other words, higher ToT alone has not been sufficient for the USD to rally; it rather needs to be more of a nefarious cross market risk shock as well. But given current levels in each  (oil & VIX), one could argue USD downside is constrained so  long as the conflict continues," JPM adds.

• U.S. export/import prices run hot, following CPI & PPI

• Keeping the USD bid intact

• Oil holding triple digits is also adding to dollar recovery

• USD/CAD eyes a move toward the 200DMAs layered at 1.3790/1.3813

• US-CA rate differentials widening in USD's favour

• For now, the topside bias is firmly in play
usdcad daily


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

Credit Agricole CIB Research discusses the scope of JPY intervention.

"Today, USDJPY was again testing the important 158 technical level, although the exchange rate’s advance was not halted by suspected intervention, but instead by BoJ dove Kazuyuki Masu signalling he could be willing to support a June rate hike...We get Japan Q1 GDP data next week and Masu’s rhetoric has potentially upped the ante on this data release as well as other cyclical data releases in the coming weeks ahead of the BoJ’s June meeting," CACIB notes.

"But strong support for the JPY is unlikely for several reasons in our view: (1) Japan’s rates market is already nearly 75% priced for a June rate hike; (2) if the BoJ does hike rates, a follow up rate hike will likely be another six months away; and (3) when it comes to relative US-Japan rates, the US side of the ledger is the stronger driver of USD/JPY and a hawkish shift at the Fed backed by strong US inflation data are driving US rates higher. So further intervention is likely the only way to cap USD/JPY for now," CACIB adds.

Nomura Research discusses the scope for JPY intervention and notes that US-Japan FX cooperation is key to capping USD/JPY upside.

"Strong US CPI inflation and higher oil prices have boosted USD, pushing USD/JPY back to above 157.80. If Middle East tensions do not ease, the pair may continue to drift higher, but the 158 area is likely to attract increased caution around intervention," Nomura notes.

"Japan’s Finance Minister said Treasury Secretary Bessent confirmed close US-Japan cooperation on FX and financial market responses. This suggests US support for Japan’s intervention stance, which could limit further USD/JPY upside, though coordinated intervention still seems unlikely," Nomura adds.

• AUD/USD rallied to 0.7264 overnight, sellers emerged, the pair turned lower

• Broad-based USD buying drove the pair down to 0.7239 in early NY

• AUD/USD was down -0.23% despite rallies in gold, stocks and a USD/CNH drop

• The pair held within Wednesday's daily range and above the 10- & 21-DMAs

• Rising monthly RSI, wider Bolli bans, hold above 61.8 Fib of 0.8007-0.5910 are bullish

• US jobless claims, April retail sales are data risks in NY's morning
audusd


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

• Intervention has been focused on USD/JPY

• It is the trade-weighted yen that is weak not USD/JPY

• USD/JPY currently 158 was 360 in 1970

• In contrast the trade-weighted fell to a record low in March

• Monetary policy clearly remains too loose undermining yen

• There are five currencies of particular concern

•
Trade-weighted yen. USSD/JPY and the dollar index


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

• UK trade deficit widened far more than expected

• The prior months shortfall was revised higher

• At GBP 27.2 billion the deficit is largest on record

• Business investment fell 1.8% in Q1

• First decline for investment since Q4 2024

•
Business investment


GBP/USD


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

Just one of two strong EUR/USD trends will endure, and the outcome will have great bearing on other major currencies as well as some influence on the entire FX market.

This year's 1.2084 high slightly exceeded the 1.2016 target for a minor correction of the downtrend from 1.6040 in 2008 to 0.9528 in 2022. However, this proved to be a false break, followed by the liquidation of the second-largest bullish wager on record, worth $27 billion.

Interestingly, though, the result of this sea change in positioning did not push the pair down too far. The drop to 1.1409 fell shy of the 1.1336 target for a minor correction, or 38.2% retracement, of the 1.0125–1.2084 rise seen between February 2025 and January 2026.

There has never been a close above the 200-month moving average, which was at 1.1940 when EUR/USD reached this year's high in January and has since fallen to 1.1898. Its closer proximity to EUR/USD's current level, along with the reduction in bullish positioning, heightens the chance of a break. However, EUR/USD has been trapped by the divergent pulls of stocks and oil.

While the surge in oil weighs on EUR/USD, the continuing boom in stocks is providing further support for the EUR/USD rally that has occurred alongside it.

At some stage, traders will take a decisive position, guided by oil, stocks, the conflict in the Middle East, and its implications for inflation and economic growth. This will result in either the resumption of a downtrend that has been refreshed by a correction and has the potential to run far below parity, or a bigger rally that, without the restraint of bullish wagers, could swiftly extend toward 1.28 and will probably reach 1.35.

There has been a recent bullish signal, with the 21-month moving average at 1.1302 rising above the 100-month moving average at 1.1237. The overbought conditions evident when the pair peaked in January have also been alleviated, with the top of the 20-month Bollinger Bands at 1.2358 allowing room for a larger rise.
Targets for resumption of the downtrend lie below parity

Targets for a bigger correction of the EUR/USD downtrend and key
techs


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