• Overnight FX option expiry includes Tuesday's Bank of Japan policy decision but related USD/JPY premium is very low

• Overnight expiry USD/JPY implied volatility is 12.0 - a premium break even of 79 JPY pips in either direction

• According to Bank of America - 12.0 is 7.5 vols below the long term median average for BoJ pricing

• BoA also note that 12.0 is 0.5 below Aprils BoJ meeting price - itself the lowest price in 4-years (34 meetings)

• Broader JPY implied vol weighed by topside long gamma from 161-162 barriers/triggers and tight spot ranges of late

• US/Iran preliminary peace deal adding further weight as broader FX volatility risk premiums are reduced
Overnight expiry USD/JPY FX option implied volatility


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

• Cable rose to 1.3460 in Asia as safe-haven dollar weakened on US-Iran peace deal

• 1.3460 is the highest level since June 5 (1.3483 was high that day, pre-NFP data)

• Friday's NY session range was 1.3390-1.3423 (Thursday low was 1.3325)

• First Fed meeting chaired by Warsh this week (Tuesday-Wednesday)

• BoE rate hold expected this week. Bailey defends BoE decision to reduce gilt holdings

• CFTC data: net GBP short rose by 22% to 64,213 contracts in week to June 9

GBPUSD


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

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

• EUR/USD:1.1500 (8BLN), 1.1520-35 (3BLN), 1.1540-50 (1.4BLN), 1.1575-80 (1.4BLN), 1.1600 (1.6BLN)

• 1.1625-30 (1.7BLN), 1.1635-45 (518M)

• USD/CHF: 0.7945-50 (561M). EUR/CHF: 0.9190-0.9200 (1.5BLN)

• EUR/GBP: 0.8615 (500M), 0.8635 (160M). GBP/USD: 1.3360 (290M), 1.3450 (172M), 1.3550 (213M)

• AUD/USD: 0.7050-55 (940M), 0.7075-85 (1.6BLN), 0.7100 (221M), 0.7150 (445M)

• NZD/USD: 0.5825-30 (812M), 0.5850 (206M). USD/CAD: 1.3880 (553M)

• USD/JPY: 159.50 (722M), 159.90-160.00 (1.2BLN), 160.50 (301M), 160.75 (728M), 161.00 (810M)

• AUD/JPY: 112.00 (330M)(Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD +0.6% Mon but extension constrained with RBA meeting underway

• RBA policy meeting outcome due Tue, no change to 4.35% OCR expected

• U.S.-Iran peace deal announcement invigorates bulls across markets

• Gold +2.5%, equities firmer as Brent crude plummets 4.8% in Asia

• AUD sellers towards 0.7121 55-DMA likely to cap topside run pre-RBA

• Range Asia 0.7036-885, support 0.6834, resistance 0.7121 0.7200 0.7283
AUD Daily 55-DMA

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

• GBP/USD rises 0.25% in Asia as risk rallies on Iran peace deal

• U.S., Iran reach preliminary agreement to end war, signing set for Friday

• Trump says deal with Iran complete, authorises opening of Strait of Hormuz

• WTI crude -5.6%, S&P futures +1.1%, Nikkei +5.4%, U.S. 10-yr yield -6 bps

• GBP rallies to 1.3460 from a 1.3419 open, slips to 1.3435 as details sketchy

• Fed, BoE rates, UK May inflation, retail sales, April employment this week

• Makerfield election on June 18 key as UK political uncertainty rises

• UK losing jobs abroad due to high energy costs, manufacturers and union warn

• UK, Japan agree tech partnership and vow fighter jet progress

• Resistance 1.3470-80, 1.3500-10, support 1.3410-20, 1.3380, 1.3350

• Friday range 1.33835-1.3426, Asia 1.3419-1.3460
Latest UK gross domestic product (GDP) growth:

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

• AUD/USD -0.2% from Mon 0.70885 high as initial impact from peace deal fades

• Peace deal announcement well received despite some conflicting claims

• Brent crude -3.9%, gold +2.0%, equities firmer on risk appetite uplift

• RBA policy meeting outcome due Tue, no change to 4.35% OCR expected

• AUD trading near upper hourly Bollinger band, progress higher tough pre-RBA

• Range Asia 0.7036-885, support 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.)

• Some pessimism towards US-Iran peace deal but USD/JPY heavy early Asia

• 160.15 early to 159.74, tracking away from 160.59 EBS high Thursday

• Crude oil prices off and market likely risk-on, JPY supportive?

• Technically, USD/JPY still holding around 159.98 daily Ichimoku tenkan

• Spot now below 160.01 hourly tenkan, 160.04-05 cloud, 160.06 kijun

• Next support below at 159.51 spike low Thursday

• In options, plenty of nearby expiries today to help contain action

• 159.00 $932 mln, 159.50-90 $1 bln, 160.00 $1 bln, 160.35-95 $1.8 bln

• JGB-US Treasury rate differentials tad narrower, 2s @265, 10s @182 bps

• BOJ policy announcement tomorrow, hike eyed, FOMC announcement Wednesday

• Market likely on tenterhooks ahead of these policy announcements

• Related comments , , ,

• Also , on US-Iran , ,

• US markets , , ,

• Post-deal crude , also ,
USD/JPY:


NYMEX crude oil futures:


JGB-US Treasury 2-year interest rate differential:

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

• NZD/USD +0.6% early Mon as U.S.-Iran peace deal agreement announced

• NZ May electronic card retail sales +1.7% m/m, +3.3% y/y

• Iran says its commitments take effect Fri, claims U.S. blockade ends Mon

• Trump & Pakistan PM Sharif jockey for headlines in wake of agreement

• NZD upswing slowing near 0.5865 55-DMA, break above may re-accelerate move

• Range NZ 0.5845-65, support 0.5680 5580, resistance 0.5990-95 0.6012
NZD Daily 55-DMA

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

• AUD/USD +0.5% early Mon after announcements proclaim end of Iran conflict

• Pakistan Prime Minister Sharif says deal to be signed in Switzerland Fri

• Trump claims deal complete, Strait of Hormuz to reopen & blockade end

• RBA policy meeting outcome due Tue, no change to 4.35% OCR expected

• AUD flirting with 0.7080 resistance zone, will be tough to break ahead RBA

• Range Asia 0.7036-84, support 0.6834, resistance 0.7080 0.7200 0.7283
AUD Daily 55-DMA

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

• NY opened near 1.1575 after EUR/UD rallied 1.1557-1.1590 in Europe's morning

• The pair fell early on firm USD, US yields & an upward move in oil

• 1.1560 was neared but the drop stalled, buyers then emerged as risk improved

• Hopes for the U.S. and Iran to sign a peace deal put a bid under riskier assets

• USD, US yields, oil moved downward while stocks, gold & silver rallied

• EUR/USD neared 1.1585 then sat near 1.1575 late, it was down -0.05% late

• A daily doji candle formed, suggests consolidation of gains off Thursday's low

• Falling RSIs, pair's hold below the 10- & 21-DMAs are concerns for EUR/USD bulls
eurusd


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

• NY opened near 0.7044 after AUD/USD rallied during Europe's morning session

• The pair neared 0.7030 as USD, US yields & oil

moved upward

• AUD/USD then rallied on hopes a US-Iran peace deal will be signed

• USD, yields, oil softened while gold , silver , stocks rallied

• USD/CNH slid toward 6.7630 after rallying toward 6.7660 earleir in the session

• AUD/USD hit 0.7060 then neared 0.7050, it traded near flat late in the day

• A daily long legged doji formed which gives AUD/USD bulls some comfort
audusd


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

• GBP$ near session high in NY afternoon, +0.01% at 1.3417; NY range 1.3423-1.3390

• Optimism over US-Iran deal lifting risk ex-USD; dollar steady awaiting details

• Pair continues to sled around the middle of the recent 1.33-1.35 range

• Peace will likely boost GBP/USD, gains likely tempered amid UK policy, political risks

• UK PM Starmer says he has not lost authority, will fight to stay in job

• Fed, BoE expected to hold next week; BoE to hold rates in 2026, minority see a hike

• GBP$ res at bruised 200-DMA by 1.3420, Friday high 1.3426, 1.3487 daily cloud top

• Supt 1.3383 Friday low, 1.3325 daily low 1.3325, 1.3298 lower 30-d Bolli

• Long tail in Thurs/Friday candlestick hints at growing support

Chart:


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

Goldman Sachs Research previews next week's June SNB meeting.

"We continue to expect the SNB to remain comfortably on hold at 0.0% at next week's meeting, in line with consensus and market pricing. We anticipate a slight upgrade to the conditional inflation forecast for 2026 and 2027, as the energy price shock now looks more persistent than in March. Further ahead we expect the policy rate to remain on hold," GS notes.

"We see risks tilted slightly towards hikes in case of a re-escalation or stronger pass-through into core inflation, in which case the SNB could build some policy space," GS adds.

The near-term outlook for sterling has reverted to caution as fluid geopolitical developments remain a top source of market uncertainty.

The recent rise in risk appetite following President Donald Trump's announcement regarding a potential U.S.-Iran deal had supported the pound, which rebounded from recent lows near the lower end of its 1.33-1.35 range, stabilizing around 1.34. However, confidence in an accord remains fragile. Iran's FARS news agency cited a source close to the negotiating team flatly dismissing reports of a Sunday signing ceremony in Geneva as false, which has tempered GBP/USD gains.

The reaction in the oil market, which rallied off session lows on the FARS news but remains down 2.5% on the day, underscores the link between oil prices and inflation expectations. Elevated oil prices have implications for UK and global inflation, and a swift resolution to the U.S.-Iran situation could help ease long-term inflationary pressures. This may provide the Bank of England with more leeway to adopt a dovish stance on interest rates, as Governor Andrew Bailey has indicated that the BoE is not in a rush to hike rates and is closely monitoring data for signs of second-round inflation effects.

Broader UK political and fiscal concerns also loom large, potentially capping any bullish momentum for GBP/USD above 1.35, especially as traders eye May highs in the mid-1.36s. Thus, while the short-term outlook for sterling is positive, significant headwinds remain.
GBP Chart:


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

Bank of America Global Research discusses its USD bias into next week's June FOMC meeting.

"We stay bullish USD (vs. EUR & CAD) but recognize two-way risk heading into the FOMC meeting," BofA notes.

"We think a hawkish outcome is more likely, but Fed pricing & USD longs reflect this, making a dovish surprise the "pain trade". Warsh will be the focus but also the SEP projections - recent communication suggests the median FOMC view has turned hawkish. It would be a surprise if this does not translate to a meaningfully higher dot plot distribution," BofA adds.

• Cable hugs 1.3400 as it consolidates gains from 1.3325 (Thursday low)

• 1.3400 approximates to mid-point of the past week's 1.3307-1.3483 range

• Early NY session high was 1.3417 - which is also the 200-day moving average

• UK PM Starmer says he has not lost authority, will fight to stay in job

• Defence resignation exposes spending bind for Starmer - and any challengers

• Burnham set to challenge Starmer for Labour leadership, if he wins by-election

GBPUSD


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

Credit Agricole CIB Research flags downside risk for USD/CAD in H2 targeting the pair at 1.35 by year-end.

"Risks initially flagged for 2026 have in the end not materialised, but new ones have  emerged, although these have hardly altered the course of the CAD so far this  year, which has largely matched our expectations," CACIB notes.

"Looking ahead, we stick to our  forecasts that see USD/CAD going into H226 around current levels and ending the  year near 1.35 as money markets may face a reality check regarding 2027,  especially in the US. That may not necessarily be enough to spur a major  turnaround in market positioning that has been consistently long USD/CAD in the  past two years on the likely basis of a historically large interest rate gap, while our  VALFeX estimate of around 1.32. long-term forecasts embed some mean reversal to our downwardly-revised," CACIB adds.

HSBC Research flags the scope for another wave of JPY intervention by Japan's MoF.

"According to CFTC data, as of 2 June, the market's short JPY positioning via futures and options has moved to a Z-score of -1.94, reminding us of stretched levels seen in mid-2024 just before the MoF intervened. We think the MoF may soon intervene again," HSBC notes.

Admittedly, unless the Bank of Japan implements hawkish rate hikes, and/or oil prices fall materially and the Fed resumes its rate cut cycle, we doubt intervention alone can shift the USD-JPY trajectory into a downtrend. Our base case (assuming two hikes by BoJ in June and December - which are nearly fully priced in by the OIS market; oil prices normalising at year-end/early 2027; and no rate changes by the Fed) is for USD-JPY to be trapped in a sideways range, capped by intervention but supported by negative real rates in Japan. We forecast USD-JPY at 155 for end-2026," HSBC adds.

• Cable has traded a 39 pip range since the London open; 1.33835-1.34225

• 1.34225 is 3.5 pips shy of Asia high; 11 pips shy of Thursday's intra-week high

• Risk-sensitive pound supported by prospect of US-Iran peace memorandum

• US-Iran peace memorandum could be signed on Sunday in Geneva, source says

• Gilt yields fall sharply on prospect of US-Iran peace deal. UK GDP fell 0.1% in April

• BoE survey shows British public's inflation expectations surged on Iran war

GBPUSD

• EUR/CHF trades on 0.92 handle before Swiss referendum Sunday

• Swiss to vote on whether to implement 10 million population cap

• 0.9234 was EBS six-week high for EUR/CHF on Wednesday

• EUR/CHF might rise to 0.94 if Switzerland votes to implement population cap

• SNB is expected to keep its policy rate at zero next Thursday (June 18)

• ECB policymakers keep July hike on the table

EURCHF


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

• Dollar steadies as traders question prospects for near-term ceasefire

• USD/JPY has seen a 159.95-160.38 range, on Friday, according to EBS data

• That after spot staged a partial recovery on Thursday after slumping to 159.51

• Thursday's losses induced dip buyers, above Thursday's 160.59 high would be bullish

• 30-day log correlation between USD/JPY, EUR/JPY crashes below +0.5 (relationship breaks down)

Daily Chart


Daily Chart


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

June 12 (Reuters) - There are several reasons why EUR/USD could be set for a bigger recovery and FX traders can use a simple option strategy to capture potential gains. Thursday's candlestick left a long tail, pointing to a rejection of the downside. This suggests scope for initial gains to 1.1633 Fibo, a 38.2% retrace of the 1.1849 to 1.1500 (April to June) EBS fall. Downside momentum also failed to sustain breaks on Monday and Thursday below the 1.1513 Fibo, a 76.4% retrace of 1.1409 to 1.1849 (March to April) rise. This raises the risk of a bear trap - when a market breaks below a technical level but then reverses, usually a bullish sign.

Seasonality is another support. EUR/USD has risen in 16 of the last 26 years, so a close above this month's 1.1655 open would reinforce that pattern. Those looking to position for the upside can buy a one-week 1.1570 call option for 40 pips, priced with spot at 1.1564. Profit potential is unlimited if spot rises above the 1.1610 break-even point before the June 19 expiry. Losses are limited to the premium paid.
Daily Chart


Fenics Pricing Grid


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

• AUD/USD has traded a 29.5 pip range thus far Friday; 0.7024-0.70535

• The top of that range is 1.5 pips shy of Thursday's two-day high

• Thursday peak was scaled as safe-haven USD fell after Trump cancelled strikes on Iran

• 0.6979 was two-month low before the planned strikes were cancelled

• Trump says Iran war deal close. RBA rate hold expected next week (Tuesday)

• CFTC data at 1930 GMT to show if net AUD long shrank again in week to June 9

AUDUSD


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

• Cable has traded a 29 pip range thus far Friday; 1.3397-1.3426

• The top of that range is 7.5 pips shy of Thursday's intra-week high

• Thursday peak was scaled as safe-haven dollar fell after Trump cancelled strikes on Iran

• 1.3325 was three-day low for GBP/USD before the planned strikes were cancelled

• Trump says Iran war deal close. UK economy shrank by 0.1% in April, as expected

• Healey's surprise resignation fuels questions about UK PM Starmer's future

GBPUSD


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