• EUR/CHF has slipped below its 200-day MA as unrest in France weighs. A close below would reinforce the bear bias

• As previously flagged, the shift in preferred funding currencies is likely a bigger drag for EUR than CHF

• Event risk keeps EUR soft. The French budget debate begins on Oct 20

• Given that the vote is expected to fail, much of this should already be priced in

• The focus is therefore on how EUR reacts to the events, not the outcome itself - eyes also on the Bund-OAT spread

• Initial support is at 0.9215, followed by 0.9180

• If the negatives are largely in the price, these levels of support should limit downside in the near-term
EURCHF daily chart

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

French risks are feeding into EUR/USD on two fronts: near-term budget worries are weighing on spot and short-dated options, and the 2027 presidential election is starting to show up further out.

Near term: French budget worries remain a concern for EUR traders. Another weekend of protests and wider French government bond (OAT)-Bund spreads are weighing on EUR/USD on Monday, pushing it back below 1.1200. That is supporting short-dated EUR puts and underpinning implied volatility. Buyers have returned to the front end, with 1-week and 2-week risk reversals regaining 0.4 EUR puts over calls from neutral. The 1-month 25-delta contract opened in London around 0.425, up from 0.25 last week. The bounce is modest compared with last week's drop, when long-USD bets taken on since mid-September were unwound, especially against the euro. It does show that downside risks are lingering.

Further out: The 6-month expiry now spans the first round of the presidential election on April 18, 2027. Its implied volatility has risen to 6.5 from 6.3 since Friday, and 25-delta risk reversals were paid at 0.55 EUR puts over calls, from 0.4. That is not a small move for an event so far in the future.

The 6-month tenor should stay supported relative to the dates before it. More risk premium is likely when the expiry rolls past the second round on May 2, 2027.
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility

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

• Cable remains on 1.33 handle as it consolidates gains from 1.3137

• 1.3137 was 11-month low on Oct 14, before two cent+ rise on short-covering

• 1.3371 was three-and-a-half week high for GBP/USD on Friday

• CFTC data: net GBP short rose 9% to 106,964 contracts in week to Oct 13

• 106,964 is largest net GBP short position since March 2017

• GBP/EUR hit 17-month high in Asia, as euro fell on weekend violence in France

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 October 19

• EUR/USD: 1.1175-80 (1.2BLN), 1.1200 (1.5BLN), 1.1225 (670M), 1.1255-65 (2.1BLN), 1.1280 (672M), 1.1300 (2.1BLN)

• USD/CHF: 0.8230 (209M), 0.8250 (270M), 0.8300 (1BLN), 0.8325 (369M)

• GBP/USD: 1.3200 (338M), 1.3395-1.3400 (506M), 1.3435 (550M)

• AUD/USD: 0.6950 (610M), 0.6970-75 (1.7BLN), 0.7010-15 (928M)

• NZD/USD: 0.5650 (360M), 0.5720 (260M). USD/CAD: 1.4165 (749M)

• USD/JPY: 157.00-15 (1BLN), 157.90-158.00 (445M), 158.60 (240M), 159.30 (300M)

• Friday's FX options wrap - Long-USD bets unwound, EUR/USD leads (Richard Pace is a Reuters market analyst. The views expressed are his own)

Oct 19 (Reuters) - Sterling is poised to extend its gains against the euro as a recovery in the pound versus the dollar gathers pace. A monthly close in EUR/GBP below the 200-month moving average (200-MMA) would open the way to major downside targets.

The fundamental drivers remain Bank of England and European Central Bank policy expectations, and broad-based dollar moves.

EUR/GBP has staged a recovery from a new trend low, 0.8395, in early Monday trade but the 200-MMA still has technical significance.

The cross has closed above the average on a monthly basis since May 2025. The average currently sits at 0.8465, while the cross trades at 0.8427, so a close below the average this month would mark a decisive break.

A 76.4% Fibonacci retracement of the December 2024 to November 2025 advance, which ran from 0.8222 to 0.8867, gives a first target at 0.8374. Beyond that level, the April 2025 and December 2024 monthly lows offer more ambitious objectives at 0.8325 and 0.8222, respectively.

Momentum supports the bearish case. The 10-month moving average is set to cross below the 20-month moving average, reinforcing the longer-term downtrend.

A sustained move above September's high at 0.8612 would be needed to challenge the underlying bearish view.
EUR/GBP monthly chart:

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

• Shares of Australia's Nordic Resources rise 9.4% to A$0.175, on track for their best day since August 7, if gains hold

• The nickel-copper miner enters an agreement with Finland's Timalfi Partners Ay to acquire the Jukulainen gold project in central Finland

• Company says initial consideration of deal is EUR15,000 ($16,843.50), with deferred consideration of EUR85,000 due within 15 months following final grant of a legally valid Jukulainen licence

• Adds company must complete a minimum of 200m of drilling at Jukulainen within 12 months of final licence grant

• YTD, stock down 10.3%, including session's moves

($1 = 0.8906 euros)

(Reporting by Subhalakshmi Dey in Bengaluru)

• AUD/USD +0.4% Mon, buoyed by better than anticipated CN data suite

• CN Q3 GDP +1.2% (poll +1.1%), Sep retail sales +1.1% (poll +0.6%)

• AUD/EUR buyers drove AUD rally early Mon as ongoing FR riots cause anxiety

• RBA Assistant Governor Kent says labour market looser than forecast

• RBA Deputy Governor Andrew Hauser speaks at Citi investment conference Wed

• AUD remains stuck in downtrend, current upswing unlikely to extend very far

• Pair targeting 0.6865 support zone, break would open downside significantly

• Range Asia 0.6945-80 support 0.6865 0.6834, resistance 0.6995 0.7282
AUD Daily 21/100/200-DMA

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

• EUR/GBP down 0.15% in Asia after sliding 0.45% early Mon on France riots

• Dropped to lowest since May 2025 after weekend riots in major French cities

• Macron urges calm as France counts the cost of worst unrest in years

• France's budget concerns, political uncertainty also weigh

• Ukraine war escalation, US-Ukraine tensions take a toll on euro

• Trump-Zelenskiy rift threatens vital support for Kyiv

• Putin proposes summit with Trump and Xi over Ukraine conflict, WSJ says

• Support 0.8395, 0.8375, 0.8350-55, resistance 0.8430-35, 0.8450, 0.8470-75

• Asia range 0.8395-0.8421, Friday range 0.8420-0.8450
EURGBP:

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

• AUD/USD +0.3% with a suite of important CN data scheduled later Mon

• CN GDP, industrial output, retail sales, and house price data all due

• RBA Assistant Governor Kent says labour market looser than forecast

• AUD/EUR buyers drive AUD rally early Mon as ongoing FR riots cause concern

• Zelenskiy condemns U.S.-RU diesel deal, U.S. reinstates intelligence sharing

• RBA deputy Governor Andrew Hauser speaks at Citi investment conference Wed

• AUD targets 0.6865 support zone, break below would entrench downside trend

• Range Asia 0.6945-80 support 0.6865 0.6834, resistance 0.6995 0.7282
AUD Daily 21/100/200-DMA

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

• USD/JPY ensconced in daily Ichimoku cloud, below 200-DMA, Asia 157.72-158.11

• Looks to be in stasis, Ichimoku cloud 156.64-158.44, 200-DMA 158.57 above

• Upside seen capped ahead of 159.00, 158.95 EBS highest recently on Oct 14

• Japanese exporters, others continue to look to sell into rallies

• Renewed Nikkei weakness this week could see foreign buyers cut ccy hedges

• Importer demand still eyed on dips and still somewhat supportive

• In options, no massive expiries today till 157.00-15 total $1.1 bln

• Fading Fed Oct rate hike expectations saw JGB-US rate differentials narrow

• In 2s to around 212 bps, in 10s to around 212-215 bps

• IMM CTAs cut some JPY longs but still hefty at 50,207 contracts latest week

• Related comments , , ,

• Also , Japan news , IMF on BOJ

• US markets , , ,
USD/JPY:

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

• NZD/USD +0.1% Mon as RBNZ rate hike bets continue to firm

• Futures pricing now implies 86.9% probability of 25 bps RBNZ hike Oct 28

• NZD clear above 0.5637 21-DMA for first time in seven weeks

• Further topside consolidation likely, pair may push toward 0.5780 zone

• NZ Sep trade balance -1.97 bln, prior month revised to -1.54 bln

• Critical NZ Q3 CPI update due Thur (prior +1.5% q/q, +4.1% y/y)

• Range NZ 0.56545-63, support 0.5566 0.5485, resistance 0.5650 0.5995 0.6012
NZD Daily 21/55/100-DMA

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

• EUR/USD -0.4% from Fri's 1.1240 close in early Asia trading Mon

• Rioting in FR continues with mounting damage, more than 2.4k arrests so far

• Romanian fighter jets shoot down suspected RU drones over territorial waters

• Zelenskiy condemns U.S.-RU diesel deal, seeks additional support from EU

• U.S. reinstates intelligence sharing with Ukraine after last week's pause

• EUR targeting 1.1065 17-month low, break opens door for move towards 1.0733

• Range early Asia 1.1182-1.1224, support 1.1065 1.0733, resistance 1.1710
EUR Daily 21/55/100-DMA

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

• GBP$ holds slight gain in NY afternoon, +0.28% at 1.3313; NorAm range 1.3371-1.3310

• Early NorAm session gains dialed back amid broad equity weakness, tech soft again

• Macro narrative shifting from inflation, fiscal & geopol concerns to USD long unwind

• Post-US CPI rise getting over its skis as Fed Chair Warsh mum on future policy moves

• Cable a high-yielder, sees its gains outpace other majors with lower yields

• LSEG's IRPR indicates BoE to hike in early-Nov, w/50% odds for further hike in Dec

• GBP$ res 1.3371 Friday high, 1.3406 50% Fib of 1.3675-1.3137, 1.3434 flat 200-DMA

• Supt 1.3300 psychological lvl, 1.3268 Friday low, 1.3254 daily conversion line

GBP Chart:

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

• NY opened near 1.1255 after 1.1208-1.1269 traded overnight, choppy trading early

• Bears eventually took control however as USD, US yields

firmed up

• USD/CNH bounced off its low while gold, silver, stocks traded down in NY's afternoon

• EUR/USD neared 1.1210 then sat near 1.1225 late, traded near flat late in the day

• Daily RSI is rising but a daily inverted hammer formed which is a worry for bulls

• Falling monthly RSI, widening Bolli bands are also concerns for bulls
eurusd

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

Goldman Sachs discusses the latest FX move post this week's US September CPI print.

"The FX moves post CPI are also telling. The currencies most exposed to AI -- USD KRW TWD are all weaker whilst funding currencies EUR CHF JPY all stronger.

Rather than 'classic risk off', this looks more like a Terms of Trade repricing as currencies tied to AI capex financing and supply chains are being sold together, regardless of their usual risk-off/risk-on betas,"GS notes.

"To help frame this it's worth also dusting off the 2022 concept of R -- the level of rates above which financial stability/credit concerns start to bite.

Given the scale of leverage now embedded in the AI capex ecosystem, we may be approaching a level of yields (R) where that ecosystem becomes materially more rate-sensitive than it was even six months ago," GS adds.

• NY opened near 0.6960 after 0.6916-0.6967 traded overnight, pair lifted early

• Upbeat risk helped the pair lift above the 10-DMA, hit 0.6966

• US yields firmed, USD rallied & risk sentiment turned sour

• Gold, silver and equities erased early gains and traded down in NY's afternoon

• AUD/USD fell toward 0.6935, traded up only +0.23% late in the session

• Daily inverted hammer, 10-DMA resistance, falling monthly RSI are bear signals
audusd

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

Bank of America Global Research discusses EUR positioning outlook.

"The notable outperformance of EUR post-CPI reinforced the perception that EUR shorts are exceptionally crowded. While we agree the hedge fund/CTA community is heavily short EUR, broader data is less conclusive. Our asset manager survey shows the biggest reduction in EUR FX exposure on record, but shorts are still within the '22/'24 levels, let alone the depths of the 2010s peripheral crisis," BofA notes.

"Up/down volatility measures imply pockets of crowded EUR shorts (vs. JPY & AUD) but not more broadly. Ultimately, the direction of OAT-Bund spreads remains paramount for EUR - a 100-150bp range (our base case) implies a floor for EUR, especially if no Moody's downgrade next week. That said, our France fieldtrip this week did little to assuage investor concerns," BofA adds.

• EUR/CHF elicits support at 0.9260 after extending south from 0.9334

• 0.9334 was Wednesday high. 0.9260 was EBS 10-week low on Oct 2

• Oct 2 low was plumbed as French fiscal concerns rattled the euro

• 0.9486 was EBS 17-month high for EUR/CHF on Sept 30

• Franc-funded carry trades were very popular in Q3 (unwinds since then)

• Stop-loss orders may be sheltering below 0.9250/60, and 0.9200

EURCHF

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

Credit Agricole CIB Research discusses EUR/USD near-term outllook.

"The most intense phase of the EUR sell-off seems to be behind us. The respite came despite lingering concerns about the ability of the parties in the French National Assembly to compromise on the 2027 budget. We think that the EUR has benefited from a broader shift in sentiment on the global fixed income markets that reflected fading central bank rate hike expectations amid softer energy prices and a renewed stock market sell-off focusing on technology companies," CACIB notes.

"These developments helped the EUR by: (1) putting an end to the widening of the spread between OAT and other EGB yields vs Bunds; and (2) helping the currency’s relative rate spreads consolidate near its lows, as investors pare back their Fed and BoE rate hike expectations. In the near term, EUR-investors will continue to follow the progress of the French budget bill in the National Assembly," CACIB adds.

ANZ Research discusses USD/JPY outlook for the coming week.

"The focus next week is September’s national CPI. August core CPI eased to 1.7% y/y, below the 1.8% forecast and the eighth month below the BoJ's 2% target, with fuel subsidies offsetting higher oil costs. The recent Tokyo print points to upside risk. Tokyo core CPI jumped to 2.7% in September, and core-core rose to 3.0%. However, much of the jump reflected the end Tokyo’s water and childcare subsidies, which will not carry over to the national figure. Firm core-core and services prints would support our view of a December hike," ANZ notes.

"We remain "sell on rallies", with the 157.9 resistance now being tested and profit-taking likely around 153. Official resolve should cap upside. A move above 160 would likely prompt stronger warnings from Tokyo and Washington and raise the prospect of coordinated intervention. The FOMC on 27–28 October and the BoJ decision on 30 October are the next catalysts," ANZ adds.

• Cable hits 1.3349 after extending north from 1.3137 (11-month low Wednesday)

• 1.3349 is highest level since Sept 22 (1.3386 was the high that day)

• Short-covering has aided the two-cent+ rise to 1.3349

• CFTC data showed net GBP short hit 14-week high in week to Oct 6

• Diminishing probability of Fed rate hike this month weighs on dollar

• Probability of Oct 28 Fed hike is now 15% vs 50% (briefly) on Wednesday

GBPUSD

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

• EUR/USD breaks the 23.6% Fibo of 1.1711-1.1113 drop at 1.1254 drop for 1.1269 - opens 38.2% Fibo at 1.1341

• Big FX option sales of EUR puts vs calls (downside vs upside strikes) via risk reversals early Friday

• Benchmark 1-month 25d risk reversal sold 0.3-0.275 - from 0.9 last week and near 1.7 l-term high in early Oct

• 2-month 25d risk reversals were sold at 0.4 and 0.3 EUR puts over calls on a huge €700-million a leg today

• Paring of EUR puts and light demand for EUR calls suggests perceived EUR/USD downside risk is easing
EUR/USD 25 delta risk reversals-


EUR/USD daily chart (EBS)

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

• EUR/USD has rebounded to 1.1250 from Wednesday's post-CPI low of 1.1113, its weakest since May 2025

• Key Fibonacci resistance is 1.1254, the 23.6% retracement of the 1.1711-1.1113 fall

• A break/close above 1.1254 opens the 21-dma at 1.1293 and the 38.2% Fibo retracement at 1.1341

• FX option markets shows traders paring downside bets and mild demand for EUR/USD topside protection

• Support lies with Thursday's 1.1150 low, 200-weekly moving average 1.1102 and 1.1100 option barriers/defence

• Related comment - Dollar may no longer hedge US equity risk
EUR/USD daily chart (EBS)

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

• Cable rises to 1.3325 as probability of October Fed hike declines on Warsh

• 1.3325 is highest level since Sept 23 (1.3345 was the high that day)

• Warsh made no comment on hot US CPI, PPI data when he spoke in Bangkok

• Probability of Fed hike on Oct 28 is now 15% vs 50% (briefly) on Wednesday

• Short-covering aids rise to 1.3325, from 11-month low of 1.3137 Wednesday

• CFTC data at 1930 GMT to show if net GBP short rose again pre-US CPI

GBPUSD

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