Goldman Sachs Research summarizes its Fed and ECB policy trajectory for the rest of the year.

"We expect the Fed to leave the policy rate unchanged at 3.5-3.75% for the rest of 2026," GS notes.

"We expect the ECB to deliver one more 25bp hike in September to a peak policy rate of 2.5% before cutting back to 2% in 2027, though we see a low hurdle for a September hold if Euro area data comes in weaker than expected," GS adds.

• Cable remains on a 1.34 handle after Burnham becomes Labour leader

• Burnham will replace Starmer as Britain's prime minister on Monday

• GBP/USD range since the London open is 1.3427-1.3481 (high before low)

• 1.3427 is also the low since Wednesday's nine-week high of 1.3556

• CFTC data at 1930 GMT to show if net GBP short fell further from June's 9-year high

• UK June inflation data due next week; CPI forecast at 2.7% YY (Reuters poll)

GBPUSD


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

Bank of America Global Research on why they expect 75bp of Fed hikes this year despite client pushback.

"We've gotten a good deal of client pushback on our call for 75bp of Fed hikes this year, starting in September. In this piece we lay out some of the arguments we have heard, and explain why we disagree. These arguments can be broken out into three categories: i) "The Fed shouldn't hike," ii) "The Fed should hike but it won't", and iii) "The Fed might hike but 75bp is too much"," BofA notes.

"Some clients think the Fed shouldn't hike because inflation is being driven by one-offs. Per our math, however, underlying inflation is well above target. Some have argued that Warsh will use the task forces as an excuse to not hike. We think he has strategic reasons to hike soon: he'd gain credibility without having to own the inflation problem. Is 75bp too much? Markets are already pricing nearly 50bp of hikes so it would take at least 75bp to deliver meaningful financial tightening," BofA adds.

USD/JPY is likely to retain a dip-buying bias as weakness in AI-linked shares, U.S.-Iran tensions and a hawkish Fed continue to underpin demand for the high-yielding dollar. Stronger-than-expected June import prices, along with higher oil, reinforced the Fed's inflation concern, helping keep Treasury 2-year yields and the dollar supported on Friday.

A series of higher lows over the past week underscores USD/JPY's bullish bias, as does a two-month streak of closing near or above a rising 21-DMA. That average, now near 162.00, is reinforced by the Tenkan-sen, making the level an important gauge of underlying momentum. Even so, conviction behind the rally appears limited. Declining volatility and subdued turnover suggest few are willing to chase USD/JPY higher, particularly as Japanese officials step up rhetoric regarding rising JGB yields and yen weakness.

As a result, price action has become increasingly compressed beneath its year-to-date high. The pair is effectively forming a wedge pattern bounded by the July 3 low at 160.48 and the July 1 and year-to-date high at 162.84.

A break above the wedge ceiling, the 162.84 YTD high and 163.00 option barriers would challenge favorable July yen seasonals and could trigger a stronger upside move.

Conversely, a daily close below the 21-DMA and Tenkan-sen would signal a potential bearish shift ahead of the July BOJ meeting, an event historically associated with heightened intervention risk.
Yen


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

Credit Agricole CIB Research runs simulations  for USD/JPY short-term fair-value.

"We run simulations using our FAST FX model for USD/JPY allowing for three major themes we expect to drive the exchange rate in the coming 18 months: (1) the Fed & the BoJ and the US-Japan short-term rates spread; (2) investor concerns about Japan’s fiscal sustainability and the BoJ being behind the inflation curve & so the US-Japan box yield spread; and (3) the US-Iran war and oil prices & equity markets. We also allow for interactions between these theme," CACIB notes.

...The lower end of our simulation estimates for USD/JPY’s short-term fair value of about 163.50. If, however, a peace deal fails to emerge and the Strait of Hormuz recloses, (1) USD/JPY’s fair value rises to nearly 171...

The median outcome of all our simulations is 170.45, suggesting that the path for USD/JPY is higher unless the structural weaknesses in the JPY are addressed," CACIB adds.

• AUD/USD hit 0.7001 overnight, sellers emerged, the pair then turned lower

• USD rally despite US yield drop weighed down AUD/USD

• USD/CNH rally to 6.7810, oil gains & copper's drop also added weight

• AUD/USD fell below the trend line off the May 13 high, hit 0.6966

• The pair traded down -0.40% in early NY action

• US June housing starts, industrial production & July U of Michigan risks loom
audusd


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

Billions of euros in FX option strikes around the low 1.14s have helped cap and underpin EUR/USD in recent weeks — a reminder that, while not an exact science, large impending option expiries can influence the spot market as they approach. EUR/USD has edged up a touch since Tuesday's softer-than-expected U.S. CPI data, but it remains well entrenched within a long-standing 1.1400-1.1500 range, with plenty more option strike expiries within those parameters likely to keep shaping price action into next week.

Traders using FX options to trade volatility are also heavily involved in the cash market, and as an option expiry approaches — 10 a.m. New York (1400 GMT) for G10 currency pairs — hedging flows will typically increase as the cash-versus-option relationship becomes more crucial to profit and loss. If an option is likely to be exercised, the opposing party may need to buy or sell more of the underlying currency to meet their obligation. These flows can often drive spot towards the nearest and largest strikes, adding to any nearby support or resistance and helping to contain price action until those strikes expire. There are many large strikes between 1.1400 and 1.1500 that expire on Friday July 17. Monday, July 20, sees the largest expiries at 1.1385-1.1400 (3.2 billion euros), 1.1425 (1.4 billion), 1.1440-50 (1.2 billion), 1.1475-90 (3 billion) and 1.1500-10 (1.7 billion).

Tuesday, July 21 brings 1.1400 expiries worth 2.3 billion euros, alongside 1.1445-50 (1.6 billion), 1.1470-85 (4.3 billion) and 1.1500 (2 billion). Wednesday, July 22 has 1.1400 expiries on 3.3 billion euros and 1.1490-1.1500 on 1.2 billion, while Thursday, July 23 sees 1.1400-10 (1.1 billion), 1.1450-65 (3.2 billion) and 1.1500-10 (2 billion). The lack of spot volatility within a familiar range is also weighing on FX option premiums - with EUR/USD implied volatility languishing close to multi-year lows.

Related comment - FX clues from the options market
EUR/USD OTC FX option strikes expiring July 17-2


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

• Risk aversion may support USD

• Big rise in price of natural gas to weigh EUR/USD

• Rise from June's low have stalled in overbought conditions

• Correction target for June's 1.1622-1.1325 drop has been met

• Downtrend from 1.2084 in Jan to 1.1325 in Jun may resume

• Size of net euro short is small, little influence

•
EURUSD


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

July 17 (Reuters) - The euro's slide against the dollar since the Iran war erupted has unfolded inside a structural range that has held for over a year — and that range may now be approaching its resolution.

EUR/USD's monthly price action has been boxed between two long-term moving averages: the 100-month and 200-month trackers are currently at 1.1207 and 1.1863, acting as floor and ceiling respectively. The range has already been tested twice. The euro pushed against the boundary in May 2025, and again in January 2026, and on both occasions the pair closed back inside the envelope by month-end — a pattern that has only reinforced the strength of the walls.

Not all boundaries carry equal weight. The 200-month average, sitting atop the range, captures far more price history than its 100-month counterpart, making it the tougher barrier to crack. The 100-month floor, by contrast, is the more vulnerable of the two.

That asymmetry lines up with the current bias: with the euro's monthly momentum still tilted lower, the more probable path is a break beneath the 100-month floor rather than a breach of the 200-month ceiling. Should the floor give way, the monthly Ichimoku cloud — a system mapping trend, momentum, and support/resistance — projects a downside target of 1.0940-EBS pricing.

That base case isn't unconditional, though. It rests on the market's current pricing of Federal Reserve rate hikes holding firm. If those bets fade — on softer U.S. data or a durable Gulf de-escalation — the dollar leg of the equation weakens instead, flipping the technical conversation entirely. In that scenario, a confirmed break above the tougher 200-month ceiling would point to a shift into a structurally higher trading range, with the January high of 1.2084 as the next marker.

The message is less a directional call than a conditional map: the floor is the more probable break point given current momentum, but the ceiling scenario remains very much alive if the Fed narrative shifts. Either way, the range's long defence means whichever wall finally cracks will likely set the tone for the pair's next major leg.
EUR/USD Monthly Chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• AUD/USD holds sub-0.70 as Asian stock losses weigh on risk-sensitive AUD

• 0.70 was Asian session high. There is a large 0.7000 option expiry today

• 0.69765 marks the intra-day low (0.6986-0.7012 was Thursday range)

• CFTC data to show if net AUD position less bearish for first time since mid-May

• Data due at 1930 GMT: net AUD short was 24,651 contracts in week to July 7

• Australian jobs data due next week. Another RBA rate hold expected in August

IMM net AUD short


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

• Cable is back below 1.35 before Andy Burnham becomes Labour leader

• 1.34585-1.34789 is Friday range-to-date (1.3460 was Thursday low)

• Burnham will replace Keir Starmer as Britain's prime minister on Monday

• Pound set for third straight weekly gain (sterling shorts squeezed midweek)

• 1.3556 was nine-week high for GBP/USD Wednesday, on FT's Mahmood tip

• Cable was sub-1.32 before Starmer's resignation speech on June 22

GBPUSD


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

• FX option strikes expire at 10am New York/14:00 GMT on Friday July 17

• EUR/USD: 1.1400 (652M), 1.1415 (305M), 1.1425-30 (1.2BLN), 1.1450 (944M), 1.1475 (348M), 1.1500 (1.5BLN)

• USD/CHF: 0.8100-05 (1.1BLN). GBP/USD: 1.3385 (566M), 1.3400 (244M)

• AUD/USD: 0.6935 (430M), 0.7000 (516M), 0.7015 (200M).

NZD/USD: 0.5900-05 (282M)

• USD/CAD: 1.4000 (388M), 1.4015 (475M), 1.4075 (716M), 1.4090 (487M)

• USD/JPY: 162.00 (571M), 162.15-25 (485M), 163.00 (318M)

• EUR/JPY: 185.00 (175M), 186.00 (175M)

• FX options wrap - The great FX volatility drought (Richard Pace is a Reuters market analyst. The views expressed are his own)

• GBP/USD down 0.1% as selloff in Asian equity markets weighs on sentiment

• Nasdaq extends drop, down 1% as tech stocks sold; Nikkei, Taiwan down 4.7%

• Geopolitical tensions weigh; Trump accuses China of 2020 voting interference

• Iran, U.S. step up attacks; Houthis ready to hit shipping on Iran signal

• Andy Burnham to be made UK Labour leader Fri on way to becoming PM

• Support 1.3440-50, 1.3400-05, resistance 1.3500-10, 1.3540

• Thursday range 1.3460-1.3542, Asia 1.3464-1.3479
GBP:

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

• NZD/JPY remains very much the darling of carries, very buoyant

• Asia 94.70-99 and holding below 95.06 high yesterday

• Yesterday's high best since 95.41/42 double top May 29/June 1

• Moving higher with 94.10-66 hourly Ichimoku cloud, tenkan 94.84, kijun 94.81

• Hawkish RBNZ expectations continue to be NZD supportive

• GBP/JPY tad lower in Asia on profit-taking by recent GBP longs, 218.61-94

• Not surprising ahead of the weekend, after Burnham ascendancy discounted

• GBP off some but retest of 219.58/60 double top yesterday/Wed next week?

• High yesterday/Wednesday best since 222.73 in January 2008

• Hourly Ichimoku cloud between 218.01-73 likely to provide downside cushion

• Ascending 100 and 200-HMAs below at 217.79 and 217.42, respectively

• Related comment , for more click on [FXBUZ]

NZD/JPY hourly:


GBP/JPY hourly:

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

• Shares of Australia's Beacon Minerals fall as much as 4.7% to A$2.620, their lowest point since July 2

• Stock has lost 18.4% so far this week, set for its biggest weekly drop since the week ended February 6

• The gold producer says it produced 5,241 ounces of gold from Jaurdi Gold Project, Western Australia in the June quarter, compared with 7,365 ounces in the pcp

• BCN stock down 5.4%, YTD

(Reporting by Keshav Singh Chundawat in Bengaluru)

• AUD/USD consolidates in Asia after closing 0.1% lower on Thursday

• Weighed down by tech selloff, Iran-U.S. tensions which dampen risk mood

• Robust U.S. economic data, hawkish comments from Fed officials cap rally

• 38.2% Fibo of May-June decline at 0.7023 continues to thwart AUD rise

• Resistance 0.7020-25, 0.7050, 0.7070-75, support 0.6970-75, 0.6940-45

• Thursday range 0.6986-0.7012; Asia 0.69915-0.70009
AUD:

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

• USD/JPY in stasis and likely to remain so into long Tokyo weekend

• Asia 162.33-40 EBS so far, equilibrium of sorts still on 162 handle

• USD rebounded a bit yesterday, USD/JPY affected to an extent

• US-Iran war, Japanese importer, retail, other demand on dips continuous

• Threat of FX action helping to cap upside alongside summer trading lull

• JGB-US rate differentials have narrowed too, 2s @271, 10s @184 bps

• Technically, USD/JPY holding above 161.99 daily Ichimoku tenkan

• Hourly tenkan 162.43 above, kijun 162.26 below, cloud 162.04-12

• Ascending 100-HMA 162.20 and flat 200-HMA 162.17

• Option expiries today 162.00-25 total $1.1 bln, 163.00-90 $1.1 bln

• Related comments , , also

• US markets , , ,

• Fed-speak hawkish , ,

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

USD/JPY daily:


USD/JPY hourly:


JGB-US Treasury 2-year interest rate differential:

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

Danske Research maintains a bearish forecast profile on EUR/USD and a short position in spot targeting a move towards 1.11.

"We maintain our downward-sloping EUR/USD forecast profile unchanged as we continue to see both tactical and structural downside potential for the cross," Danske notes.

"We expect US real economic growth to outpace euro area by a wide margin this year and expect the Fed to tighten its monetary policy more than the ECB. As an energy net exporter, US is better insulated against renewed energy supply shocks than the euro area," Danske adds.

(Corrects data in bullet 2 to PPI)

• GBP$ under pressure in NorAm session, -0.51% at 1.3469; NY range 1.3517-1.3460

• Wednesday's rally on soft US PPI and talk of fiscally responsible UK FinMin faded

• Pair unable to add to Wednesday's 1.3556 2-month high as US-Iran truce wanes

• Oil a touch lower, UST yields off session highs; risk broadly under pressure; stox, metals lower

• EZ HICP the next key data set m/m seen lwr, y/y steady at 2.8%; Japan CPI on July 23

• GBP$ supt 1.3460 Thurs low, 1.3437 daily cloud top, 1.3399 flat 200-DMA

• Res 1.3512 bruised upper 30-d Bolli, 1.3556 Wednesday 2-mos high, 1.3610 May 12 daily high

• For all the cheer at the FinMin headline Wednesday, UK 10-yr gilt yields remain near 5%

GBP$ Chart:


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

MUFG Research maintains Fed rate outlook post this week's soft US inflation data.

"The US inflation data released this week supports our view that the Fed is likely to leave rates on hold this year contributing to a re-weakening of the US dollar. The key test will be inflation data released over the summer alongside developments in the Middle East," MUFG notes.

"Our forecast for the Fed to leave rates on hold was also supported by some dovish comments yesterday from Fed Chair Kevin Warsh when speaking about the near-term inflationary impact from surge in capital investment related to AI...The comments indicate a willingness to be patient with sources of inflation that he believed to be temporary, including demand from AI investment. In the medium-to-long run he remain optimistic that AI will deliver a positive supply shock to the US economy and prove disinflationary," MUFG adds.

• Ether traded 1927.69-1867.01 Thursday, was down -2.11% into Europe's close

• Drops aided by USD buying, firm US yields & gold, equity drops

• Despite Ether's sharp fall it still trades within Wednesday's daily trading range

• That's a signal that Ether is entering a consolidation phase of its recent gains

• The consolidation will give daily RSI a chance to unwind its near overbought condition

• Rising monthly RSI, Ether's hold above the 10- & 50-DMAs are bullish signals

• June's monthly high is resistance, a break may trigger stop buying, short squeeze

• Ether bulls may then target 2420.00-2475.00; Feb. March, April, May highs sit there
eth


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

JP Morgan likes to sell EUR/USD on rallies and buy USD/CAD on dips.

"Plans to re-sell EURUSD are still there but would want to see more pain well into the 1.15 handle on a more ‘medium’ term basis using the 200d (1.1642) as a risk point," JPM notes.

"Little to note from the BoC yesterday outside it sounding a little more optimistic with growth revised higher and inflation expectations easing. CAD took little note and instead took its cue from the broader dollar weakness seen in G7 (that is still hard to fully explain, outside softer US inflation numbers). We still remain bearish on CAD although note this is a well held view in the market, so looking for more of a position unwind and a dip below 1.40 to enter into USDCAD longs," JPM adds.

• Like gold, S African rand has been popular purchase for traders

• Cash embedded in FX carry trades may be influenced by bigger gold drop

• ZAR, MXN, HUF and BRL very popular buys last 18 months

• Liquidation of gold and silver bets may underpin USD

• Any unwind of carry trades would pressure illiquid EM currencies

• The rand's closer links to gold heighten risks for it

• Bitcoin's silence, gold's retreat: A crossroads for risk and the dollar

•
USDZAR


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

Goldman Sachs Research sees Oil, the Fed and AI as the 3 themes driving the markets through year-end.

"Three themes-oil price relief, the Al theme and US growth optimism, and a hawkish Fed shift-have dominated the market narrative in recent weeks," GS notes.

"These three themes seem likely to remain the focus. We expect the purer macro forces-oil and the Fed-to resolve in a modestly benign direction and for macro assets to remain in narrower ranges as the conventional risks recede.

But views around the Al theme are likely to continue to shift and the risks there are in both directions, so we expect that to be the primary source of volatility for equity markets. The main macro risk is a further sustained rise in oil prices. Barring that, we think the shift from macro volatility to micro volatility will continue," GS adds.