Credit Agricole CIB Research previews next week's ECB October policy meeting.

"We do not expect the ECB to hike in October; we expect it to hike in December to 2.75% and in March 2027 to 3.00%, as we explained in our previous paper," CACIB notes.

"The ECB will very likely remain non-committal, in a data-dependent, meeting-by-meeting mode. In this context, the market action could be highly uncertain, as it was at the September press conference. However, the recent pricing seems more reasonable than it used to be. 

The topic of France will likely be discussed during the Q&A. We expect Christine Lagarde to be ready to answer questions in a way that will avoid rattling markets," CACIB adds.

• NY opened near 0.7010 after 0.7036 traded overnight, the drop then extended

• USD buying, firm US yields & gold, stocks drops weighed on the pair

• Copper, silver drops reinforced risk-off sentiment, AUD/USD hit 0.6995

• The pair's fall halted. buying then emerged as the dollar, yields moved downward

• AUD/USD sat near 0.7220 in NY's afternoon, traded down only -0.14%

• Daily, monthly bull hammers, hold above 10- & 21-DMAs are bull signals

• Rising monthly RSI, bull pennant on monthly chart add to bull signals
audusd

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

ANZ Research discusses EUR/USD technical outlook.

"EUR/USD remains technically weak, trading around 1.12 and well below its major moving averages. However, downside momentum is easing. The RSI has recovered to 36 after moving into oversold territory, while MACD is beginning to flatten," ANZ notes.

'"We would therefore be cautious about chasing the pair lower at current levels. We see initial support at 1.115 and next at 1.11, with resistance at 1.13 and 1.14," ANZ adds.

• Trend indicators like the RSI shows EUR/GBP is deeply oversold

• German-French spreads are at fresh highs, so the cross can still get more oversold

• French risks are not going away, instead, they are growing

• Oversold readings caution against chasing the cross low

• But with EUR sentiment worsening, there is little appetite for a rebound

• Initial support remains at 0.8356, followed by 0.8333
EURGBP vs spread

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

Danske Research revises its EUR/USD rolling targets.

"Macro data continues to suggest that AI-related investments remain a key driver of global final demand growth. Reflecting this, US leading indicators shifted generally higher in September, while European data cooled modestly. Tighter financial conditions and higher energy prices pose a downside risk to growth, which we see relatively more pronounced for the euro area. Inflation exceeded expectations on both sides of the Atlantic in September, but we see a relatively higher risk of underlying inflation picking up in the US. Altogether, we continue to see relative macro as a negative driver for EUR/USD," Danske notes.

"We still think the fundamental drivers for further decline remain in place. Stronger domestic demand in the US, relative monetary policy outlook and elevated energy prices all favour lower EUR/USD over the coming year. We lower the 6-12M target to 1.10," Danske adds.

Bank of America Global Research arues that Equity breadth matters for USD controlling for level and rates.

"The S&P 500 has been largely rangebound since August but far more ink has been spilled on the decline in market breadth. Poor equity breadth has connotations for the durability of the risk rally but may also matter for the broader direction of the US dollar," BofA notes.

"Exhibit 1 and Exhibit 2 show loose correlation between the DXY index and measures of equity breadth. A narrow rally - a smaller proportion of stocks trading above 200dma and/or the underperformance of an equally-weighted S&P 500 index - is often associated with a stronger USD," BofA adds.

• EUR/USD resilient despite fresh highs in oil and the Bund-OAT spread

• This reinforces the view that bearish EUR trades are better expressed on the crosses (CHF, JPY)

• Dollar struggling on a softer tone in AI/tech names. Positioning has also been a problem

• Plenty of competing narratives - geopolitics, AI, French stress - keeping USD conviction low

• EUR/CHF is cleanly through the 200-day MA (0.9238). A closing below will embolden sellers

• Initial support is at 0.9215, which has been tested. Further cushion sits at 0.9180

• SNB minutes signalled less need to intervene in FX. That paves way for deeper pullback in EUR/CHF

• Bund-OAT spread remains the real-time indicator for the cross

• At fresh highs, this will keep EUR/CHF on the backfoot
EURCHF daily

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

• Cryptocurrency and blockchain-related firms slide in premarket trading

• Bitcoin , the world's biggest cryptocurrency, slides 3.15% to $81,974.01 after climbing for three straight sessions

• Ether down 3.33% at $2,408.48

• Crypto exchange Coinbase Global declines 3.8%

• Crypto miners: Riot Platforms Inc , MARA Holdings , Hut 8 and Bit Digital down 3% to 5%

• BTC buyer Strategy slides 5.4%, among the biggest decliners

• BTC mining machine maker Canaan Inc down 3.4%

• ProShares Bitcoin Strategy ETF loses 3.2%

• iShares Bitcoin Trust ETF down 3.1%

• Bitcoin remains down over 6% YTD, while ether has fallen roughly 19.2%

(Reporting by Jayasree Prabhu)

• French 10-year bond yield rises to 5.09%

• French yield above US 10-yr for first time since 2013

• Brent crude oil climbs above $112 per barrel

• EUR/USD remarkably stable 1.1227-1.1255 on Oct 22

• Oct 14 low 1.1113 when French bonds less stressed, oil lower

• Roles of Japan's dual purpose currency are changing and that's worrying

• EUR/USD traders may act differently under truly risk averse conditions

•
EURUSD French bonds and oil

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

• USD/JPY's slide from 158.00 met strong demand after basing at 156.83 on Thursday - possibly option related

• A massive $2.8 billion 156.90-157.00 FX option strikes expire at the 10-am New York cut (14GMT) Thursday

• Related hedging flows are likely to be limiting deeper declines ahead of the expiry time, more 157s expire Friday

• Implied volatility surged as USD/JPY fell - 1-month from 7.15 to 7.65, but has been trading 7.6-7.55 as spot settles

• Risk reversals increase JPY call over put premiums - 2-week paid 2.2 and 1-month regains 2.0 from 1.9 JPY calls

• Dealers also report a pick up in downside strike demand, so traders more wary of any deeper FX declines

• Related comment - October Fed flashes on FX options radar
JPY option expiry strikes

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

• Limited and familiar USD/JPY ranges around 158.00 pressed FX option implied vols lower this week

• Range-bound spot favoured option sellers with actual/realised volatility being well below implied levels

• However, risk reversals held a firm downside strikes premium - recognising the most vulnerable side of the market

• Thursday's spot drop to mid Oct lows toward 157.00 appears to have caused some panic demand for options

• Benchmark 1-month expiry implied volatility paid 7.65 from 7.15, with some sub 157.00 strikes paid, too

• Huge FX option strike expiries surround USD/JPY in low 157's - related hedging flows may limit deeper spot decline
USD/JPY FXO implied volatility

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

• USD/JPY continuing lower in late Asia trading, from 158.33 in New York

• Asia from 158.25 early to 157.33 EBS, through 157.46/55 lows Oct 5/15

• Towards 157.00 and 156.96 low on October 2

• Seems total $9.1 bln in option expiries today on 157 having little impact

• Another $3.1 bln below between 156.70-97 strikes

• Dealers unsure what's behind today's Asia PM move down, exporters?

• Some cite flows, perhaps from Japanese investors, others say long-paring

• Option gamma plays also cited with spot now below mega-expiries today

• Whatever the case, USD/JPY moving deeper into 155.64-158.44 daily Ichi cloud

• Related comments , , , also
USD/JPY:

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

(Corrects typo USD/JPY 156.90-157.00 )

• FX option strikes expire at 10am New York/14:00 GMT on Thursday October 22

• EUR/USD: 1.1195-1.1200 (2.8BLN), 1.1210-20 (1BLN), 1.1235-40 (1BLN), 1.1250-60 (1.6BLN)

• 1.1270-80 (1BLN), 1.1300-05 (6.1BLN)

• GBP/USD: 1.3380-85 (370M), 1.3475 (200M). EUR/GBP: 0.8450-60 (348M)

• AUD/USD: 0.7000-05 (1BLN), 0.7010-15 (1.2BLN), 0.7020-30 (550M), 0.7035-40 (460M), 0.7050 (247M)

• NZD/USD: 0.5700-05 (616M). EUR/JPY: 178.50 (460M).

AUD/JPY: 109.25 (200M)

• USD/JPY: 156.90-157.00 (2.8BLN), 157.05-15 (627M), 157.25-35 (2BLN), 157.50 (1.7BLN), 157.55-60 (844M)

• 157.70-80 (1.6BLN), 157.90-158.00 (1.9BLN), 158.05-15 (2BLN)

• FX options wrap - Euro hedgers widen the net (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Shares of Australia's Austral Resources rise as much as 5.1% to A$0.062, marking their biggest intraday pct gain since October 6

• The copper cathode producer says drilling at its Cameron River project in Queensland returned high-grade copper-gold intersections across multiple prospects

• Company says reconnaissance drilling confirmed copper-gold mineralisation across six prospects, most of which remain open at depth and along strike

• Adds that 25 of 32 drill holes returned significant copper intersections, supporting further exploration at the project

• Stock up 7%, YTD, including session's moves

(Reporting by Subhalakshmi Dey in Bengaluru)

• AUD/USD -0.2% Thur as buyers step back despite firming RBA hike bets

• Pair pushing lower hourly Bollinger band, downside momentum likely muted

• Futures pricing now implies 65.1% chance of Nov RBA hike, up from 29% Tue

• Move fuelled by RBA Hauser comments that inflation looks materially worse

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• Brent crude +1.2% as U.S. diplomats ordered to leave Saudi Arabia

• Nasdaq finished +1.1% Wed on SpaceX & Super Micro earnings uplift

• Range Asia 0.7013-36 support 0.6865 0.6834, resistance 0.7140 0.7282
AUD Hourly Bollinger Study


AUD Daily 21/55/100-DMA

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

• USD/JPY in stasis, continues to trade sideways, Asia so far 158.12-22 EBS

• Still holding below 158.56 200-DMA, at top of 155.64-158.44 daily Ichi cloud

• Pivoting around 158.13-15 wafter thin hourly Ichimoku cloud

• Massive nearby option expiries today to help contain spot action

• 156.70-97 $3.1 bln, on 157 $9.1 bln, 158.00-15 $3.4 bln 158.25-50 $3.7 bln

• At 158.75 $1.2 bln and between 159.00-40 total $3.3 bln, gamma all over

• JGB-US Treasury rate differentials on wide side, in 2s @289, 10s @223 bps

• Good demand for long-dated JGBs this week, especially after good auctions

• Japanese exporter offers still up top, Japanese importer bids below

• Related comments , , ,

• Also

• US markets , , ,
USD/JPY:

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

• Shares of Vault Minerals fall as much as 3.1% to A$5.600, their lowest since August 7

• Gold producer reports quarterly gold production of 76,849 ounces, down from 92,087 ounces in the previous quarter

• YTD, stock up 3.5%

(Reporting by Tejas Harish in Bengaluru)

• NZD/USD -0.2% Thur as NZ inflation slows more than expected in Sep quarter

• NZ Q3 CPI +0.7% q/q (poll +0.8%), +3.7% y/y (poll +3.8%)

• Futures pricing still implies probability of Oct 28 RBNZ hike above 90%

• NZD remains clear of 0.5634 21-DMA, extension towards 0.5775 zone likely

• Nasdaq +1.1% after SpaceX and Super Micro results stoked earning optimism

• Range NZ 0.5690-0.5703, support 0.5566 0.5485, resistance 0.5995 0.6012
DXY Daily 55/100/200-DMA


NZD Hourly Bollinger Study

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

Danske Research on its EUR/GBP outlook.

"EUR/GBP has rebounded slightly higher to 0.86 after trading close to 0.8450 over the summer. Political instability has once again faded and with a more pragmatic pick for UK chancellor, fiscal sustainability worries have taken a backseat. However, we are attentive to budget risks ahead of the Autumn Statement. The UK economy has also performed better than expected although the past weeks data releases have been to the weaker side," Danske notes.

"We highlight that the UK economy remains fragile and that we see scope for the significant repricing of the BoE to revert to a larger extent than for the ECB, opening for a move higher in EUR/GBP. We continue to forecast EUR/GBP to move higher from current levels but now see the outlook more balanced," Danske adds.

• AUD/USD +0.3% from Wed 0.70045 low in wake of hawkish RBA comments

• AUD probes 0.7034 100-DMA, likely to extend run toward 0.7075 55-DMA

• Futures pricing now implies 55.5% probability of 25 bps hike on Nov 3

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• U.S. tech stocks lifted by earning positivity from SpaceX and Super Micro

• Overnight range 0.7018-36 support 0.6865 0.6834, resistance 0.7140 0.7282
AUD Daily 21/55/100-DMA


DXY Daily 55/100/200-DMA

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

• GBP$ regained vigor in NY afternoon trade, +0.15% at 1.3399; NorAm range 1.3403-1.3381

• Despite slight gain pair anchored by 4-wk highs just above 1.34, capped by 50-DMA at 1.3409

• Today's above f/c UK CPI/PP data affirms expected 25bp rate hike by BoE in early Nov

• LSEG's IRPR indicating BoE rate hikes higher and faster than Fed boosting GBP

• UK Autumn Budget Nov 28 risks stalling bullish trend, though fiscal rules likely to be followed

• GBP$ res 1.3409 Tuesday high, 1.3433 flat 200-DMA, 1.3470 area upcoming cloud twist

• Supt 1.3381 Wednesday NorAm low, 1.3315 daily base line, 1.3268 Oct 16 low

GBP EOD Chart:

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

• NY opened near 1.1235 after 1.1214 traded overnight, 1.1238 traded early NY

• Sellers emerged and 1.1215 traded as USD, US yields

moved up

• EUR/UDS bears couldn't maintain momentum as USD buying faded away

• Yields softened while oil & USD/CNH traded lower on the session

• Rallies in gold and equities contributed to the USD selling theme

• EUR/USD sat near 1.1235 late, was close to flat in NY's afternoon

• Daily long legged doji, monthly bull hammer candle are concerns for bears

• EUR/USD's hold above the 10-DMA also contributes to those concerns
eurusd

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

Bank of America Global Research previews next week's UK Autumn budget due on Oct-28.

"With France the epicentre of market focus, it may be easy to forget that we are a little over 1 week away from the first John Healey Budget. The sense of anticipation (and perhaps apprehension) that has greeted recent Budgets is so far lacking and GBP seems agnostic to upcoming developments at least in the spot FX space. GBP/USD 1mth volatility is trading higher but this reflects the broader step adjustment in G10 FX vol vs USD as France dominates. Our options desk, however, notes that whilst front end vol remains well behaved, daily vol for GBP/USD is 13vol versus an average of 7.5vols. Whilst Budget Day appears well owned, GBP risk premium is close to the lows of the year," BofA notes.

"All in all, our economists think that the Government will deliver a cautious Budget and adhere to the Fiscal Rules. Tougher decisions await but this is for 2027 and not the here and now," BofA adds.

• USD/CAD finding support at the 100-day MA (1.4043), with two attempts to break failing so far

• Initial resistance at 1.4077 is capping and keeping rebounds shallow for now

• On balance, sellers remain broadly in control. Further hurdles sit at the 100-hour MA cluster (1.4110)

• A break below1.4043 exposes the 50% fib of the Sep-Oct rise at 1.4030, then the Fed Sep pivot point at 1.3940

• The BoC is near fully priced to hike next week, after hawkish Macklem comments

• However, recent data (CPI + jobs) has come in softer than expected, which could see some caution creep in for CAD
USDCAD hourly chart


USDCAD daily chart

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