• USD/JPY remains bid at recent highs, Asia today 158.79-84 EBS

• Follows blip up yesterday to 159.08, highest since 160.72 April 30

• April 30 when MOF began interventions, another round May 6 from 157.93

• MOF in quandary? To intervene or not to intervene

• Latest USD/JPY rise on broad USD strength, little MOF can really do?

• Latest USD/JPY rise met with only jaw-boning so far, action soon?

• Spot holding for now near top of 156.37-158.91 daily Ichimoku cloud

• Still ascending hourly cloud 158.06-63 below, 100-HMA 158.29

• In option expiries, nothing major nearby today, some 158.00-10, 159.00

• Massive below however with $1.3 bln 157.35-50, $3 bln 156.95-157.00

• JGB-US Treasury 2-year rate differentials wider still to @268 bps

• Differential in 10s holding near recent lows, narrows, NY close @187 bps

• Related comments , , ,

• Also , on Japan jaw-boning/action ,

• US markets , , ,

• On Fed , , US economy ,
USD/JPY:


JGB-US Treasury 2-year interest rate differential:

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

• NZD/USD +0.9% from Mon 0.5824 low, rejects extension below 200-DMA

• NZ Apr electronic card retail sales -1.3% m/m (prior +0.7%), +2.0% y/y

• NZ Q1 PPI: inputs +1.4% q/q, outputs +0.8% q/q

• Futures pricing implies 71.2% probability of no RBNZ change May 27

• USD index & UST yields softer after Trump pauses Iran attack

• Iran sends new peace proposal, Trump says 'very good chance' of deal

• Range NZ 0.58594-805, support 0.5815 0.5680, resistance 0.5991 0.6012
NZD Daily 200-DMA


DXY Daily 55-DMA

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

• AUD/USD +0.7% from Mon 0.71181 low as DXY & UST yields retreat slightly

• RBA Assistant Governor Hunter speaks Tue on inflation & Middle East war

• RBA's May monetary policy meeting minutes scheduled for 0130 GMT release

• Iran sends new peace proposal, Trump claims to have paused planned attack

• AUD 0.7100 support the key inflection point short term, pair remains soft

• AU Apr employment update Thur, Reuters poll: +17.5k jobs, 4.3% unemployment

• Overnight range 0.7143-839, support 0.7100 0.6834, resistance 0.7283 0.7661
AUD Daily 55-DMA


DXY Daily 55-DMA

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

MUFG Research maintains a neutral bias on USD/CAD in the near-term.

"The CAD has weakened against the USD over the past week, after USD/CAD failed to break below the lower end of the 1.3500–1.3900 trading range that has persisted for most of this year. The USD has been supported both by the lack of progress in negotiations between Iran and the U.S. to end the conflict and reopen the Strait of Hormuz, and by a recent run of upside U.S. economic data surprises that has prompted a more hawkish repricing of Fed rate expectations," MUFG notes.

"Our short-term valuation model for USD/CAD incorporating oil prices, yield differentials, and equity market performance, suggests that fundamentals are currently unlikely to drive a breakout from the current 1.3500–1.3900 trading range in the near term," MUFG adds.

• GBP$ firm in NorAm afternoon trade, +0.72% at 1.3420; NY rane 1.3450-1.3348

• Today's rise likely position squaring ahead pre-data which may hint at hawkish BoE

• Risk selectively higher amid softer US-Iran outlook; equities up, UST yields a tad higher

• UK data includes labor data Tuesday, UK CPI/PPI Wednesday; will inform on BoE policy

• UK fiscal concerns remain elevated w/10-yr gilt yields near 5.10%, politics also a drag

• GBP$ res 1.3450 Monday high, 1.3481- 50% of 1.3658-1.3304, 1.3500 psychological lvl

• Supt 1.3392 rising 10-HMA, 1.3339 daily cloud base, 1.3304 Monday Asia session low

GBP Chart:


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

• NY opened near 1.1625 after 1.1608 traded overnight, rally extended in NY

• 1.1657 hit early NY as USD, US yields , oil

traded downward

• USD/CNH drop toward 6.7980, gains in gold, silver also helped the pair rally

• Yields, USD & oil then firmed, EUR/USD slid to 1.1634 then neared 1.1650 late

• EUR/USD was up +0.20% late in the day & daily techs flashed warnings to bears

• RSI diverged on the 1-1/2-month low & EUR/UDS pierced the 55-DMA
eurusd


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

• NY opened near 0.7150 after 0.7118 traded overnight, rally extended in early NY

• USD, US yields, oil & USD/CNH traded downward in early NY, AUD/USD then hit 0.7184

• Rallies in gold, silver & stocks bounce off its early lows helped prop up AUD/USD

• The pair then dipped as USD, yield, oil firmed while stocks turned lower

• 0.7155 traded, the pair then neared 0.7165 late; AUD/USD was up +0.20% late in the day

• Daily RSI diverged on today's low & a daily doji formed, they might be concerns for bears

• Falling monthly RSI, monthly inverted hammer candle give AUD/USD bears comfort
audusd


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

Barclays Research sees a scope for a sizeable USD rally this week.

Here and now, it appears conditions for risk and bonds are deteriorating, and conditions for the dollar rally to extend this week are ripe. 

"First, one of the proximate reasons for the dollar's recent underperformance is losing momentum. This is none other than the performance of semiconductor stocks, which are also one of the key indicators for broader equity momentum and appear to be a lot more range- bound over the past few days. To a non-trivial degree, the strong performance of risky assets has kept the dollar at bay despite data strength and high oil prices," Barclays notes.

"Second, the situation in the Middle East is not mending itself as one (including ourselves) would have assumed a month or so ago. Since the breakdown of the Pakistan talks, both sides have persisted on maximalist demands, with the most recent Iranian set of proposals quite far from something that even a more pragmatic US approach could accommodate. Oil prices have not increased due to the large initial stock of inventories and heavy draw-downs. Clearly, though, signs that the Hormuz strait will stay clogged for longer can only exert upward pressure on oil," Barclays adds. 

EUR/USD is likely to face renewed downward pressure amid prevailing economic and geopolitical factors.

After rebounding from a 1-1/2-month low on Monday, the pair has sparked some bullish sentiment among investors. However, this enthusiasm may be short-lived due to expectations regarding Federal Reserve policy, ongoing tensions with Iran and existing interest rate differentials.

SOFR futures prices rose during Monday's session but have exhibit a downward trend since mid-April, reflecting market anticipation of a hawkish Fed, which rates markets indicate could raise rates in early 2027 .

This shift has helped send the U.S.-German 2-year yield spread to its widest level since March 5, enhancing the dollar's appeal over the euro. Should the Fed's interest rate trajectory become hawkish it would likely trump and bulllish policy influence from the European Central Bank, which could exert downward pressure on EUR/USD.

Moreover, lingering tensions between the U.S. and Iran continue to buoy oil and commodity prices, adversely impacting the European economy. Should these prices remain elevated, the euro may struggle to gain upward traction.

Technically, the pair remains below its 200-day moving average, with the monthly RSI indicating a bearish trend and an inverted hammer pattern signaling potential weakness.

Unless the dollar's yield advantage diminishes or geopolitical tensions ease, the likelihood of EUR/USD trading lower remains.
deus


srah


eurusd


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

Credit Agricole CIB Research summarizes the latest reading of its positioning model.

"The AUD remains the biggest long in the G10 FX at present and saw some buying interest last week, predominantly driven by IMM flows. Our FX flow data points at banks and hedge funds inflows as well as corporates and real money investors outflows," CACIB notes.

"The NZD cemented its status as the biggest short in the G10 FX space and experienced fresh selling interest last week, predominantly driven by IMM flows. Our FX flow data points at real money investors inflows as well as banks, corporates and hedge funds outflows," CACIB adds.

Sterling is expected to face continued near-term volatility as macro anxieties limit the upside of Monday's technical rebound. The currency managed a lofty bounce off its Asia session low of 1.3304, a floor established amid heightened U.S.-Iran conflict tensions. This corrective move higher has lifted GBP/USD back within the daily Bollinger envelope and the daily Ichimoku cloud, which currently spans 1.3487–1.3339.

However, this recovery may turn out to be a transitory relief rally due to sterling-specific and global macro conditions. On the UK front, lingering political uncertainties persist. Wednesday's UK inflation data is expected to indicate rising prices, likely keeping the Bank of England on a more hawkish path that will further tamp down economic growth. Politically, the specter of a potential tax-and-spend Labour replacement for PM Keir Starmer, alongside former Health Secretary Wes Streeting’s talk of rejoining the EU, threatens to inject additional uncertainty into UK governance. This backdrop could prompt the international investing community to avoid UK assets, further exacerbating the country’s fiscal position.

For now, sterling bulls are pushing higher, regaining 1.3400 in early North American trading. Looking at the technical daily levels for May 18, immediate resistance is capped by Friday’s 1.3408 high, with tougher upside barriers looming at the 200-DMA at 1.3426 and the Ichimoku cloud top at 1.3487. On the downside, solid support aligns at the daily cloud base by 1.3339, and anchored near today's low at 1.3304 and natural big-figure support by 1.3300.
Sterling Chart:


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

Nomura Research adopts a cautious bias on USD/JPY and likes long CHF/JPY position instead.

"At the G7 Finance Ministers and Central Bank Governors Meeting on 18-19 May, with the focus on Treasury Secretary Bessent’s stance on Japan’s currency and monetary policy . It is currently unconfirmed whether Governor Ueda will attend, but as global bond yields come under upward pressure, market attention is likely to increase if a meeting between Treasury Secretary Bessent and Governor Ueda is arranged. If BOJ board member Koeda signals a positive stance toward a June rate hike in her speech on Thursday, it might provide some support to JPY,  because of the view that a majority support a June hike at the moment," Nomura notes.

"Unless there is a clear improvement in the Middle East situation, the main scenario for USD/JPY is to remain elevated, though caution is warranted regarding sporadic risks of a sharp JPY surge. We will avoid trading USD/JPY for now, recommending CHF/JPY long positions," Nomura adds.

JP Morgan Research maintain a bearish outlook for the JPY targeting USD/JPY at 164 by year-end.

"The BoJ data suggest that yen-buying intervention on April 30 amounted to about JPY 4 trillion. In the following several business days, as markets thinned out during Japan's holiday season, there were moves on May 1, 4, and 6 that raised suspicions of intervention. In fact, the BoJ data suggest that yen-buying intervention totalling JPY 4-5 trillion may have been conducted over this period," JPM notes.

"That said, as our mid-term JPY-bearish view was based on the assumption that intervention would be conducted before USD/JPY reached its cycle high of 162, the recent intervention does not change our view. Therefore, we keep USD/JPY targets unchanged at 158 for 2Q26, 160 for 3Q26 and 164 for 4Q26," JPM adds.

• USD buying, firm US yields sent EUR/USD down to a 1-1/2-month low overnight

• Oil gains & USD/CNH's rally to 6.8216 added weight, EUR/USD fell to 1.1608

• Buyers emerged however as USD selling took hold in Europe's morning

• USD came under further bear pressure due to gold, silver rallies & stocks bounce of the lows

• EUR/USD hit 1.1646 then neared 1.1630 in early NY, pair was up +0.05% in early action

• Daily RSI diverged on the low, daily doji formed, those could be warnings for EUR/USD bears
eurusd


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

• AUD/USD hit a 12-session low overnight on USD buying, US yield gains

• Higher oil prices also weighed; the pair hit 0.7118, buyers then emerged

• USD selling took hold while gold, silver turned up & stocks bounced; fhelped uel the lift

• USD/CNH drop from 6.8216 toward 6.7975 helped added buoyancy to AUD/USD

• The pair turned positive, hit 0.7165, NY opened near 0.7155, pair was up +0.08%

• Daily techs warn bears for now; RSI diverged on the low, daily bull hammer formed

• Monthly techs lean bearish; RSI is falling, monthly inverted hammer in place
audusd


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

May 18 (Reuters) - Sterling came under heavy pressure on Friday as rising political uncertainty in Britain undermined sentiment, with the selloff generating important bearish signals on the weekly GBP/USD chart. Prime Minister Keir Starmer is facing mounting pressure after the resignation of a key political rival and signs that other figures within his party are positioning themselves to challenge his leadership. The political backdrop has added to investor unease at a time when British assets are already under strain.

That pressure has been evident in the rates market. British borrowing costs have climbed sharply, with 10-year gilt yields rising to their highest level since 2008, while gilts recorded their steepest decline since April 2025.

Against that backdrop, sterling fell 2% against the dollar last week after peaking at 1.3653, just below April's 1.3658 high. The reversal ended a five-week rally and shifted the near-term technical picture more decisively in favour of the bears.

The scale of the move was particularly significant because it produced a key weekly reversal. GBP/USD pushed above the previous week's high early in the week, but upside momentum faded, sellers regained control and the pair closed below the prior week's close. That pattern points to a loss of bullish momentum and raises the risk that a broader correction is now underway.

The decline also pushed GBP/USD back into its weekly Ichimoku cloud after the pair had broken above it in mid-April. That return into the cloud adds a further bearish technical signal. Unless sterling can re-establish itself above the cloud on a weekly closing basis, the deterioration in the medium-term outlook could deepen.

The immediate levels to watch are support at 1.3304, the early Monday low, and resistance at 1.3432, the 50-week moving average. From a broader technical perspective, the risk is that GBP/USD retraces the full 1.3160-1.3658 rally recorded between March 31 and May 1.
GBP/USD weekly chart:


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

• USD/JPY has climbed on Monday, has seen a 158.64-159.08 range on the EBS

• It has broken the top of the daily cloud, which currently spans the 156.38-158.91 region

• If there is a daily close above the cloud top, that would be a very bullish development

• Verbal warnings are unlikely to stop the USD/JPY recovery

• However, the market remains nervous due to lingering direct intervention risks

• 30-day log correlation between USD/JPY and EUR/JPY is above +0.5 (pairs moving in tandem)

• Japan's extra budget to include funding from fresh debt, Reuters source says

Correlation Chart


Daily Chart


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

• Thin, late Tokyo trading saw USD/JPY pop to 159.09 EBS before pulling back

• Market obviously wary of renewed Japanese FX intervention

• Two-way option gamma trades related to $5.7 bln 159.00 expiries today too

• Japan's MOF likely closely watching FX but hands tied on strong USD?

• Related comments , , also ,
USD/JPY hourly:

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

• Rising oil weighs euro as ccy of an importer and supports USD

• EUR/USD traders added to bets on euro rising in week to May 15

• Longs grew to $5.9 billion equivalent from $4.7 billion

• Oil rises to $111 per barrel on May 18

• Crude oil has increased by $41 pb during Middle East conflict

•
EURUSD


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

• Shares of Challenger Gold fall as much as 3.7% to A$0.13, their lowest level since May 7

• Gold miner receives binding commitments for an A$85 million ($60.63 million) placement

• Issue price of A$0.12 per share represents a discount of 7.7% to stock's last close

• Funds raised through placement will be used for a resource growth drilling campaign aimed at testing broader Hualilan tenement package and others

• About 11.8 million shares traded so far, 3.5x the 30-day avg

• Down 16.1% YTD, including the session's moves

($1 = 1.4019 Australian dollars)
(Reporting by Anjali Singh in Bengaluru)

• GBP/USD down 0.1% in Asia after closing 0.55% lower Friday

• Undermined by broadly higher USD which targets 100.64, 2026 high

• Risk aversion, UK political and fiscal concerns take a toll on GBP

• Elevated oil prices, rising global yields, falling stocks weigh

• WTI crude up 2.15% as UAE and Saudi Arabia report drone incidents

• U.S. 10-yr yield jumps to 15-month high, S&P E-Mini down 0.7%

• UK Mar unemployment, Apr inflation, May PMIs, Apr retail sales due this week

• Will stand in any contest to replace Starmer- former UK minister Streeting

• Starmer set to approve $24 bln increase in UK defence spending-The Times

• UK asking prices show bigger-than-usual rise in May, Rightmove says

• Support 1.3285-90, 1.3250, 1.32 10-15, resistance 1.3350-60, 1.3390-1.3400

• Friday range 1.3315-1.34075, Asia range 1.3304-1.3330
GBP:

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

• AUD/USD -0.3% Mon as CN economic updates miss expectations dramatically

• CN Apr y/y industrial output 4.1% (poll 5.9%), retail sales 0.2% (poll 2.0%)

• AUD pushing hourly lower Bollinger band, still soft but momentum slowing

• Rising potential for Fed hikes underpins USD and UST yields strength

• Drone attack on UAE nuclear power plant pushes Brent crude +1.9%, WTI +2.2%

• RBA's Hunter speaks Tue ahead May monetary policy meeting minutes release

• AU Apr employment update Thur, Reuters poll: +20k jobs, 4.3% unemployment

• Range Asia 0.71181-526, support 0.7100 0.6834, resistance 0.7283 0.7661
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• Australian gold stocks fall as much as 3.9%, hitting their biggest intraday pct drop since April 30

• Sub-index touches lowest level since May 6

• Benchmark S&P/ASX 200 down 1.2%

• Index falls reflecting drop in bullion prices amid ongoing inflation concerns following the Middle East conflict

• Gold miner Evolution Mining tumbles 4.6% and Northern Star Resources slips 4.1%

• YTDD, AXGD down nearly 12%, AXJO declines 2.1%
(Reporting by Aamir Sheik Khalid in Bengaluru)

• EUR/JPY 184.20-82 EBS Friday, Asia indicated at 184.51 so far, inside day

• Tad broader 183.50-185.41 range since May 7, essentially sideways

• Cross looks to be re-entering daily Ichimoku cloud between 183.83-184.64

• Flattening 100-DMA 184.29, Ichi tenkan 183.72 below, kijun 184.99 above

• Near base of 184.55-74 hourly Ichimoku cloud, 100-HMA 184.78, 200-HMA 184.36

• Spot looks to be gravitating around massive E1.3 bln 184.65 option expiries

• Rare for EUR/JPY to have such massive optionality nearby recently

• Could see action today contained between 100 and 200-HMAs
EUR/JPY daily:


EUR/JPY hourly:

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