Goldman Sachs Research maintains a bearish and short tactical GBP/USD position targeting a move towards 1.3250.

"Spending announcements in the first week of the Burnham government have been relatively minor in scale. But question marks around their planned funding sources-alongside the prospect of larger spending initiatives ahead-have recentred investor focus on the risks and constraints on the UK fiscal front. We see this renewed scrutiny as having helped Sterling unwind part of its July outperformance last week, alongside a drag from resurgent energy prices and the associated risk-off impulse," GS notes.

"Part of Sterling's July divergence from cyclical fundamentals has retraced as a result, but we see risks as skewed to a near-term extension of this past week's themes and price action, and maintain our tactical short GBP/USD recommendation," GS adds.

• AUD/USD traded 0.6991-0.7011 overnight, NY opened near 0.7005, up +0.24%

• Broad-based USD selling, US yield & USD/CNH drops buoyed the pair

• Gold, silver, copper and equity rallies drove risk-on which helped lift AUD/USD

• Significant drop in oil contributed to the risk on trading theme

• AUD/USD move above the 10-DMA, rising daily, monthly RSIs are bull signals

• Pair's ongoing consolidation phase reinforces the bullish tech signals

• US June durable goods orders is a data risk during NY's morning
audusd


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

• U.S.-listed shares of silver miners gain premarket, tracking higher prices of the metal [GOL/]

• Spot silver up 2.3% at $59.3/ounce, as a pause in strikes between U.S. and Iranian forces dragged crude oil prices lower, helping ease inflation concerns and worries about the risk of higher interest rates in a week where policymakers at the Fed are due to meet

• Hecla Mining up 2.6% and Coeur Mining rises 2.9%

• Canadian miners Endeavour Silver up 3.8%, Silvercorp Metals up 3.1% and Wheaton Precious Metals up 2.2%

• Abrdn Physical Silver Shares ETF up 2% and iShares Silver Trust adds 1.9%

(Reporting by Pooja Menon in Bengaluru)

• The big yen short is getting bigger. PM Takaichi defends policy as underpinning yen

• USD/JPY could see bigger gains as it remains above the key 163.16 Fibo

• 163.16 Fibo is a 23.6% retrace of the July 160.49 to 163.99 July (EBS) rise

• Spot has seen a 163.33-71 range on Monday, according to EBS data

• USD/JPY continues to trade below last week's new 163.99 multi-decade high

• There are likely good offers ahead of 164.00, some likely option barrier defence

• Stops above 164.00 are large, however, massive barriers at 165.00 could be targeted

Daily Chart


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

EUR/USD risk reversals are FX option structures that benefit from volatility in one direction over the other, and shifts in their pricing offer valuable clues about directional risk sentiment in the broader FX market. Implied volatility itself is the market's primary sentiment gauge. Because actual, or realised, volatility is unknown in advance — yet central to how an option is priced — dealers use implied volatility as a forward-looking proxy for expected price risk. Right now, that gauge is unusually subdued: EUR/USD implied volatility remains low, a function of muted realised volatility in spot despite ongoing Middle East tensions that might otherwise be expected to inject more risk premium into the pair. But averaged implied volatility only tells half the story. Risk reversals — which combine a long position in one strike with a short position in the opposite strike — reveal the directional skew within that volatility, showing whether dealers expect upside or downside moves to be more likely to lift implied volatility. A rising premium on one side signals that the options market is positioning for, and pricing greater risk of, a move in that direction.

This is where the signal becomes actionable: when spot moves in the same direction as the risk-reversal skew, it tends to validate and reinforce that pricing, often coinciding with a fresh leg higher in implied volatility as realised volatility catches up with what options markets had already flagged.

The current setup fits this pattern. The benchmark 1-month expiry 25 delta EUR/USD risk reversal is holding near recent highs, with the EUR put over call premium (downside over upside) around 0.55. That's a firm skew, and it suggests the options market remains alert to renewed EUR/USD weakness even as spot volatility itself stays contained for now.

The persistence of that downside premium — rather than a fade back toward flat — is the key tell. It implies dealers aren't treating recent EUR/USD resilience as a reason to unwind downside hedges. Should spot begin to slip in a way that aligns with that skew, it would likely coincide with implied volatility waking up from its current lull, turning today's quiet vol backdrop into tomorrow's catch-up trade.

Related - Huge FX options could blunt any Fed driven EUR/USD volatility
EUR/USD 25 delta risk reversals


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

• USD and oil lower, but huge FX option strike expiries near 1.14 continue to pin EUR/USD in tight ranges

• Related cash hedging flows create a magnetic effect - helping to keep EUR/USD near the largest strikes

• Monday's largest strike expiries are 1.1375 (€1.8bln), 1.1400 (€1.7bln), 1.1425-35 (€1.5bln). Tues and Wed lighter

• Fed decision Thursday is the wildcard — but absent a surprise, more expiries could cap moves

• Thursday: 1.1375 (€1.5bln) plus a hefty €5bln clustered at 1.1400-15 for the 10-am New York cut expiry

• Friday adds a huge 1.1375 (€2bln) and 1.1400 (€3.5bln)
EURUSD FX option strike expiries - July 27 -31


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

• Cable elicits support from lower oil prices after US, Iran pause fighting

• 1.3363 was GBP/USD high in Asia (highest level since July 23)

• Offers likely pre-1.34 (1.3393/94 were traded highs on July 22-23)

• 1.3300 was three-week low on July 23. Friday range was 1.3306-1.3348

• Fed rate hold expected on Wednesday; BoE rate hold expected on Thursday

• CFTC data: net GBP short position shrank again in the week to July 21

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 Monday July 27

• EUR/USD: 1.1350-60 (2.2BLN), 1.1375 (1.8BLN), 1.1400 (1.7BLN), 1.1425-35 (1.5BLN), 1.1445-50 (1BLN)

• GBP/USD: 1.3300 (860M), 1.3325 (467M), 1.3350 (750M), 1.3370 (324M), 1.3400 (214M)

• EUR/GBP: 0.8550 (304M). USD/CAD: 1.4090 (247M), 1.4135 (372M). AUD/CAD: 0.9825 (450M)

• AUD/USD: 0.6975-85 (840M), 0.7000 (344M), 0.7030 (598M)

• USD/JPY: 162.00 (2.7BLN), 162.75-80 (437M), 163.00-05 (528M), 164.15 (362M)

• Friday's FX options wrap - Low volatility keeps mounting risks in check (Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD up 0.2% in Asia on hopes of U.S.-Iran de-escalation

• Iran says it will halt strikes as long as U.S. bombing pause holds

• Risk rallies as U.S. crude falls 4.5%; S&P 500 futures + 0.75%

• AUD gains muted as senior Iranian source expresses scepticism on U.S. pause

• Gains also capped on caution ahead of this week's risk events

• RBA Governor Bullock's speech Tue, Australia Q2 CPI, Fed rate decision Wed

• Resistance 0.7023, 38.2% Fibo of May-June drop; more at 0.7050, 0.7070-75

• Support 0.6980-85, 0.6960-65; Asia range 0.6991-0.7007
AUD:

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

• GBP/USD up 0.3% in Asia on signs stalled US-Iran peace talks may resume

• Trump calls off bombing, Iran says it will halt strikes as long as US does

• GBP opened at 1.3343 from Friday's 1.3323 close, rallies to a 1.3363 high

• Risk rallies as U.S. crude falls 4.5%; S&P 500 futures + 0.75%, boosts GBP

• Gains capped on caution ahead of a busy week for risk events

• Fed, BoE, BOJ rate decisions and a packed data calendar this week

• BoE to hold steady on Thu and this year but Iran war inflation risks persist

• Support 1.3325-30, 1.3299, 61.8 of June-July rally; resistance 1.3390-1.3400

• Friday range 1.3306-1.3348, Asia 1.3342-1.3363
GBP:

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

• Shares of Australia's Capricorn Metals rise as much as 15.4% to A$13.73, posting their biggest intraday pct gain since mid-March 2023

• Stock hits its highest level since July 7

• Gold explorer says 2026 group ore reserve estimate (ORE) increased 33% to 5.24 million ounces of gold at both Karlawinda Gold project and Mt Gibson Gold project

• Stock has fallen 5.3% this year, including session moves

(Reporting by Roshan Thomas in Bengaluru)

• Australia's gold index jumps as much as 5.3%, its highest level since July 23

• Gold prices rise over 3% [GOL/]

• Shares of gold miners Northern Star Resources , St Barbara up 3.3% and 7.4% respectively

• Sub-index has fallen 16.7% this year, including session moves, underperforming benchmark ASX 200's 1.6% rise
(Reporting by Roshan Thomas in Bengaluru)

• USD/JPY down a bit after push up to 163.99 Thursday, still buoyant though

• Asia 163.55-71 EBS so far, talk of US-Iran hostilities pause help cap

• No assurances of a lasting ceasefire though, key straits still 'closed"

• Hourly chart shows spot dipping into 163.33-66 Ichimoku cloud

• Descending tenkan and kijun above cloud at 163.71 and 163.75, respectively

• Ascending 100-HMA below cloud at 163.28, 200-HMA 162.79 below

• $564 mln option expiries today between 163.00-10, $490 mln 164.00-15

• More massive below at 162.00 strike, on 161

• Threat of Japan FX intervention but BOJ at week-end more significant

• Some musings BOJ meeting could be 'live' but most still eye fall hike

• JPY net shorts again very large, intervention this week would hurt specs

• Fed also seen leaning hawkish with maybe two hikes this year

• JGB-US Tsy rate differentials recently wider, in 2s @283, 10s @189 bps

• Related comments , , ,

• Also , on IMM CTA positioning

• US markets , , ,

• Crude post US-Iran truce , on US-Iran ,
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)

• AUD/USD +0.2% in early Asia on signs US-Iran stalled peace talks may resume

• Trump calls off bombing, Iran says it will halt strikes as long as US does

• US crude down 5.%, S&P 500 futures +0.7%, Nasdaq futures +1.25%

• Reports of Houthis attacking Saudi oil installations Sat may temper optimism

• Caution ahead of a risk-laden week may also lead to range trading

• RBA Governor Bullock speaks Tue; Australia Q2 CPI and Fed rate decision Wed

• Resistance 0.7023, 38.2% Fibo of May-June drop; more at 0.7050, 0.7070-75

• Support 0.6980-85, 0.6960-65; Fri range 0.6966-0.7001, Asia 0.6996-0.7007
AUD:

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

• USD net spec G10 long +$4.11bn to +$45.4bn in the Jul 15-21 IMM period; $IDX +0.3%

• Note- recent geopol climate hot, has lifted oil considerably boosting USD haven appeal

• EUR$ -0.21% in period; specs -28.7k contracts now -41.3k; ECB at 70% odds for Sept hike

• $JPY +0.57%; specs -29.5k contracts now -152.1k; USD firm awaiting BoJ hikes, intervention

• GBP$ -0.09%; specs +15.7k contracts now -55.6k; New UK PM stirs fleeting short unwind

• $CAD +0.35%; specs +1.8k contracts now -174.4k; soft CA inflation, hawkish Fed vibe lifts USD

• AUD$ +0.34%; specs -7k contracts now -37.7k; bottom-fishing likely ran into oil rise in current period

Majors w/IMM Performance Chart:


IMM Position Table as of 7-24:


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

The dollar was mixed on Friday, trimming recent gains against some currencies but edging higher versus others as easing oil prices and lower Treasury yields prompted some pre-weekend profit-taking in a low-turnover session. Pakistan and Iran are exploring a path to renewed talks with the U.S. in a China-backed diplomatic initiative.

Weekend risks are heightened after U.S. President Donald Trump said earlier this week he is close to deciding on a "massive attack" against Iran. Trump said Friday that he does not believe China or Russia are involved in the Iran conflict, warning any involvement would be "very bad" for them. Trump criticized the EU's fines on Google, saying the U.S. would investigate what he called unfair targeting of American firms. ECB chief economist Philip Lane said the inflation shock remains moderate, requiring only limited policy action, with inflation expected to return to 2% within about a year.

The dollar index retreated from its 20-day upper Bollinger, suggesting a low-turnover, range-trading environment remains intact even as Middle East tensions build. EUR/USD remained biased lower, with an inverted hammer and position below 1.14 and its 21-day moving average of 1.1414 reinforcing a bearish outlook despite intermittent USD softness. GBP/USD stayed pressured below its 21-day moving average and near recent lows around 1.3300, with a broadly balanced Fed-BoE rate outlook and lingering geopolitical uncertainty limiting its upside. AUD/USD rose and remains biased higher, supported by a softer USD and strong commodity prices, with the pair consolidating gains above its 10-, 21- and 200-DMAs beneath the 0.70 level. USD/JPY remains constructive above 163 and a rising 21-DMA, though option barriers, intervention risks and geopolitical uncertainty may keep gains choppy, leaving the pair vulnerable to a pullback.

Treasury yields were down 1 to 3 basis points as the curve steepened. The 2s-10s curve was up marginally at +35.1bp.

The S&P 500 was flat as tech weakness was offset by other sectors.

WTI oil fell over 3% on profit-taking and the report of a fresh U.S.-Iran peace initiative.

Gold rose 0.20% while copper edged up 0.15% Heading toward the close: EUR/USD -0.07%, USD/JPY -0.01%, GBP/USD +0.09%, AUD/USD +0.20%, DXY +0.02%, EUR/JPY -0.08%, GBP/JPY +0.06%, AUD/JPY +0.18%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.6990 after 0.6966 traded overnight, the pair neared 0.6975 early

• Buyers emerged as USD, US yields , USD/CNH moved downward

• Gold, silver, copper & silver rallies added weight on the USD & buoyed AUD/USD

• 0.7001 traded but some gains eroded, the pair neared 0.6985 late, was up +0.24%

• Erosion of some gains for stocks, gold & silver helped AUD/USD slip from its high

• Techs lean bullish, pair held above 10- & 21-DMAs & is consolidating recent gains

• Rising monthly RSI and hold above the 200-DMA reinforce bullish signals
audusd


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

Morgan Stanley Research maintains a neutral bias on the USD Index (DXY) in the near-term.

"We remain neutral on the DXY overall, but we see risks as decidedly skewed to the downside after two slower-than expected price prints in June: CPI and PPI," MS notes.

"The slowdown in US price pressures represents a downside risk to the  ~29bp of Fed hikes priced through December 2026 (and therefore to the USD), since by September we expect broad  disinflationary pressures to be increasingly evident in the incoming data – notwithstanding any potential energy price  effects from geopolitical turbulence," MS adds.

AUD/USD is currently navigating a mix of short-term bullish signals and longer-term bearish risks. After giving back most of Friday's gains, the pair slipped back below the 10-day moving average, though shorter-term technicals still point to upside potential. Since the start of July, AUD/USD has been consolidating its recent rally, with a bull flag continuation pattern taking shape on the daily charts. If this pattern is completed, it could propel the pair toward the 0.7150–0.7200 zone.

However, this bullish scenario is closely tied to next week's Federal Reserve meeting—if the Fed holds rates steady or adopts a less hawkish tone than markets currently anticipate, the flag pattern may complete, allowing the rally from the June 29 low to resume.

Even if AUD/USD reaches the 0.7150–0.7200 target, bulls would face a critical test, as that zone represents significant resistance. Should the rally stall and then consolidate or retreat from that level, it could mark the formation of the right shoulder in a much larger head and shoulders topping pattern. Given the scale involved, this would be an unusually large pattern.

Should this major topping formation complete with a break of the neckline, it would signal the potential for a substantial decline—potentially pulling AUD/USD all the way down toward its November 2025 monthly low.
audusd


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

Bank of America Global Research discusses EUR/USD technical outlook and sees a scope for an extended downside towards 1.1240 in  the near-term.

Post ECB and US jobless claims on July 23, the euro fell and broke below trend line support. This implies a downtrend continuation pattern has formed.

Provided the downtrend continues, we can expect euro to retest the YTD low of 1.1325, the 1.13 figure and possibly the Fibonacci retracement at 1.1240," BofA notes.

We remain in favour of this short-term setup while euro remains below the high on July 23, which was 1.1436," BofA adds.

Sterling's recent struggles could persist as escalating tensions in the Strait of Hormuz and new US tariffs introduce significant headwinds for the global economy and, by extension, the UK. The widening conflict in a key oil shipping lane, coupled with President Donald Trump's fresh tariffs against trade partners signals a potential for sustained upward pressure on oil prices and disruptions to international trade. Rising gilt yields are also increasing market scrutiny over UK government financing, weighing on the pound. Although Prime Minister Andy Burnham has pledged fiscal responsibility and hinted at a new economic model, international investors are exercising caution, awaiting clearer details. Considering these intertwined geopolitical and domestic risks, the near-term outlook for sterling appears biased to the downside. Heightened geopolitical tensions, elevated oil prices, and an uncertain fiscal landscape in the UK advocate for a cautious approach to the currency.

Technically, GBP/USD currently finds support at 1.3299, Thursday's low and the 61.8% Fibonacci retracement of 1.3140-1.3556, with further support at 1.3276, the July 2nd daily low. To reverse the bearish sentiment, bulls would need to push the pair above the 200-day moving average at 1.3399 and clear the daily cloud top at 1.3411.
GBP$ Chart:


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

Goldman Sachs Research previews next week's July BoJ meeting.

"The Japanese economy is recovering moderately in line with the BOJ's outlook. Although price trends are currently somewhat weak, we expect rising upstream costs to spill over to consumer prices going forward. Under these circumstances, in its July Outlook Report, we believe the BOJ is likely to maintain its broad scenario that the economy will continue to grow moderately albeit at a decelerated rate, and that CPI inflation will increase due to higher crude oil prices, but will subsequently decline as the impact of higher crude oil prices wanes," GS notes.

"However, with crude oil prices lower than when the April Outlook Report was published, we expect the BOJ to raise its growth forecasts and lower its price forecasts slightly in the July Outlook Report. We believe the BOJ will maintain the status quo at the July meeting, and continue to expect the next rate hike in January next year," GS adds.

ANZ Research previews next week's BoJ meeting and the scope for MoF intervention.

"While a hold is largely expected at next week’s BoJ meeting, the focus will be on the press conference and its updated forecasts which, in combination, may shape market pricing. An upward revision to FY26–27 inflation, would reinforce expectations of further tightening. A downgrade to growth on trade uncertainty would push in the opposite direction. Japan’s trade deficit widened this week as JPY weakness inflated the import bill. Import values rose 25% y/y in June, outpacing a 19% rise in exports. For now, the terms-of-trade drag points to softer net exports, near-term growth risks and continued pressure on the JPY," ANZ notes.

"Bottom line, the absence of intervention over the long weekend in Japan last week leaves the market with little reason not to test levels closer to 165 in USD/JPY. A sustained JPY turn would require more than verbal pushback; it would need at least a clear hawkish BoJ signal and more importantly a weaker USD," ANZ adds.

• EUR/USD hit 1.1376 overnight, buyers emerged and the pair turned positive

• 1.1401 traded in Europe, NY opened near 1.1385, pair was up +0.08%

• Lower USD, US yields , USD/CNH helped drive EUR/USD's gains

• Oil's drop & rallies in gold, silver, equities added buoyancy to EUR/USD

• Despite the gains technical signals still highlight downside risks

• EUR/UDS remains below the 10- & 21-DMAs and trend line off May 11 high

• Monthly inverted hammer candle, falling monthly RSI add to bear signals

• US July S&P Global PMI, June new housing sales are risks in NY's morning
eurusd


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