• Cable pushes through July’s 1.3556 high, tagging a fresh three-month peak at 1.3560

• USD under pressure after a soft US retail sales print (-0.6% vs +0.1% m/m)

• Data further reinforces case for Fed hold at the September meeting

• With sterling clearing the July resistance, 1.36 is the next near-term objective

• A decisive break here opens the door to a cluster of hurdles between 1.3658-1.3867

• Focus shifts to next week’s UK data deluge
GBPUSD daily chart


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

Bank of America Global Research discusses JPY outlook from the latest output of its quant models.

"More than a week has passed since the joint US-Japan FX intervention. So far, the operation appears relatively successful as, compared with previous episodes, investors have been reluctant to fade the rally. Indeed, the authorities' strong commitment and the high cost of failure have strengthened our bullish conviction on the JPY, and we recently revised our YE USDJPY forecast to 149 from 152," BofA notes.

"However, our quant signals raise some red flags for near-term JPY strength. Last week we saw an aggressive mean reversion in JPY skew, and option flow moved strongly in favor of JPY puts vs EUR and AUD, indicating that investors are moderating their worries on further upside. Additionally, our technical matrix has yet to trigger any positioning trend signals, while up/down vol and residual skew indicate that positioning and short-term sentiment are not yet supportive of the uptrend. Finally, our time-zone analysis indicates that JPY buying was not broad-based last week, with USDJPY finding consistent support during US trading hours," BofA adds.

• AUD/USD traded 0.7056-0.7078 overnight, NY opened near that high

• The pair traded up +0.22% in early NY on the back of broad-based USD selling

• USD sank despite firmer US yields and a drop in gold

• AUD/USD rallied back above the 50% Fib of 0.7277-0.6867

• Techs lean bullish; consolidation persists, RSIs rising, pair above 10-, 21- & 55-DMAs

• The monthly bull hammer candle for August reinforces the bullish tech signals

• US July retail sales, Aug. University of Michigan are data risks in NY's morning
audusd


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

• Range trading remains the dominant theme for AUD, with spot oscillating around the 100-day MA at 0.7058

• The 0.7075 area has been retested but continues to cap topside momentum for now

• A clean break above resistance would improve the technical picture, likely opens up a run for 0.7200

• Initial support is located at 0.7050, followed by the psychologically important 0.7000 level

• Low-vol backdrop supportive of carry demand, which should continue to underpin AUD vs low-yielding FX like CHF

• U.S. retail sales is the main near-term event risk, although the release is unlikely to materially alter the broader FX picture

• In turn, tight ranges and a lack of sustained directional momentum are likely to remain the prevailing conditions for AUD/USD
AUDUSD daily


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

• Yen's slide to weekly loss prompts bets for another intervention

• USD/JPY slips from 159.53 to 159.07 Friday, according to EBS data, but is stuck within the cloud

• The daily cloud currently spans the wide 158.92-161.42 region

• Spot has also been limited by 159.60, a 50% retrace of 163.99-155.20 intervention fueled slump

• The long tail on the Wednesday candlestick hints at gains in coming sessions

• However, beware USD/JPY and EUR/JPY usually struggles in August

Daily Chart


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

• Cable making another attempt to establish itself above 1.35, with the July high (1.3556) the next topside target

• A sustained hold above 1.35 would likely encourage fresh buying interest

• But price action remains subdued with GBP struggling to notably capitalise on tepid U.S. CPI/PPI data

• USD pullback may also lose momentum with Fed hike pricing appearing to find a floor around 25%

• This should make a clean topside break in Cable more difficult to achieve

• For now, spot appears likely to remain confined to its broader sideways range

• Ongoing lack of directional momentum continues to favour carry trades
GBPUSD hourly chart


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

• FX options expire at 10am New York/15:00 GMT on Friday August 14

• EUR/USD: 1.1425 (520M), 1.1450 (766M), 1.1475 (491M), 1.1490-95 (1.3B), 1.1500 (1.6B), 1.1540-45 (1.5B)

• EUR/USD: 1.1550 (1.4B), 1.1560-65 (427M), 1.1575-80 (660M), 1.1585-90 (684M), 1.1600 (746M), 1.1615-20 (459M)

• EUR/USD: 1.1635-40 (730M), 1.1650-55 (389M)

• USD/JPY: 155.00 (3.1B), 156.25 (200M), 156.55-60 (208M), 156.60-65 (209M), 157.95-158.00 (2.0B), 158.25-30 (413M)

• USD/JPY: 159.00 (360M), 159.35-40 (350M), 159.45-50 (645M), 159.55-60 (590M), 159.70-75 (250M), 160.00 (1.4B)

• USD/JPY: 160.60-65 (436M), 160.66 (397M), 161.90 (400M), 162.00 (223M), 163.00 (349M). EUR/JPY: 180.00 (200M)

• GBP/USD: 1.3300 (500M), 1.3320-25 (290M), 1.3400 (300M), 1.3435 (436M), 1.3500 (296M), 1.3510-15 (781M)

• GBP/USD: 1.3555-60 (434M), 1.3650 (220M), 1.3660 (410M), 1.3700 (219M). EUR/GBP: 0.8450-55 (339M), 0.8595-8600 (201M)

• USD/CHF: 0.8075-80 (204M), 0.8150-55 (779M), 0.8155-60 (1.0B)

• AUD/USD: 0.6800 (204M), 0.6900 (305M), 0.6960-65 (238M), 0.6970-75 (245M), 0.6985-90 (260M), 0.7000 (509M)

• AUD/USD: 0.7040 (254M), 0.7050 (303M), 0.7100 (671M)

• USD/CAD: 1.3250 (400M), 1.3915-20 (333M), 1.3940 (230M), 1.3975 (565M), 1.3990-95 (327M), 1.4000-05 (203M), 1.4035-40 (228M)

• USD/CAD: 1.4050 (370M), 1.4100 (1.4B), 1.4135-40 (207M), 1.4225-30 (879M), 1.4275 (230M), 1.5000 (527M)​

• USD/ZAR: 15.8000 (300M), 16.1920-2000 (210M), 16.2000-2500 (305M)
(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Traders who often follow techs are short of euros

• The 21-DMA is crossing above 55-DMA - bullish

• Shallow dip to 1.1512 from Aug high at 1.1580 - bullish

• EUR/USD yet to close above 100-DMA 1.1567

• Targets for a break: 1.1599, 1.1626, 1.1652

• FX calm may create two winners and two losers

•
EURUSD


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

• AUD/USD flat Fri as markets continue to recalibrate Fed hike expectations

• Moderating U.S. data weighing on UST yields as rate hike urgency subsides

• AUD unlikely break 0.7090 resistance short term sans left-field catalyst

• U.S. Jul retail sales due Fri, Reuters poll consensus +0.1% m/m

• RBA Deputy Governor Hauser speaks in Brisbane Wed, AU Jul jobs data due Thur

• U.S. & Iran ensconced in Strait of Hormuz stalemate, resolution not close

• Range Asia 0.7056-664 support 0.6920 0.6866, resistance 0.7090 0.7200
AUD Daily 55-DMA

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

• GBP/USD consolidates in Asia after closing slightly lower Thursday

• Failure to rally on positive news disappoints bulls

• Moderating U.S. inflation, lower Sep Fed hike odds fail to lift GBP

• UK GDP +0.3% in June from May versus forecasts of zero growth, shrugged off

• Gulf ceasefire, World Cup, and hot weather boost consumers spending

• June employment, July inflation due next week, key for BoE rate expectations

• July Retail sales, August consumer confidence, and flash PMIs are also due

• Resistance 1.3530-40, 1.3556 July high; support 1.347580, 1.3450, 1.3400-10

• Thursday range 1.3475-1.3513, Asia 1.3489-1.3498
GBP:

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

• Australian gold stocks fall as much as 2.8% in their biggest intraday pct drop since July 30

• Sub-index on course for biggest single-day drop in two weeks

• Bullion prices fell more than 1% overnight [GOL/]

• Gold miners Evolution Mining and Northern Star Resources down between 1.5% and 2.5%

• YTD, sub-index down 5.4%

(Reporting by Aamir Sheik Khalid in Bengaluru)

• Little change in USD/JPY with pair holding on 159, USD still broadly bid

• That said, little to move markets now, market summer holiday-thinned

• Last day of Japan O-Bon holidays for most but slow start eyed Monday

• Continuing Japanese importer demand at each Tokyo fix, Gotobi Saturday

• Demand from foreign investors hedging Japanese stock buys too?

• USD/JPY 159.40-53 EBS, ensconced in 158.92-161.41 daily Ichimoku cloud

• Heavy from area of flat, 159.59 daily kijun, 100-DMA 160.00 above

• Holding above 159.36 hourly tenkan, 159.30 kijun, 159.07-17 cloud

• Option expiries in area today 159.00-45 $880 mln, 159.50-75 $1.4 bln

• JGB-US Treasury rate differentials narrower still, 2s to 253, 10s 180 bps

• Seemingly no end to Middle East impasse, to remain USD supportive

• That said, further USD gains could be met by fresh FX intervention

• Related comments , , also

• US markets , , ,

• On BOJ , Fed-speak , US data

• On Middle East , , for more click on [FXBUZ]

USD/JPY:

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

• NZD/USD +0.6% from Thur 0.58216 low as U.S. data weighs on DXY & UST yields

• U.S. Jul PPI +4.7% y/y (poll +4.9%), initial jobless claims 209k (poll 202k)

• U.S.-Iran both claim control of Strait of Hormuz, stalemate set to continue

• NZ manufacturing expansion slows sharply in Jul, PMI 54.3 (prior 60.1)

• Futures pricing presently implies 85.4% chance of 25 bps RBNZ hike Sep 2

• U.S. Jul retail sales due Fri, Reuters poll consensus +0.1% m/m

• Range NZ 0.5849-575, support 0.5760-65 0.5627, resistance 0.5990-95 0.60925
NZD Hourly Bollinger Study & DXY Daily 55-DMA

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

• AUD/USD +0.2% from Thur 0.7044 low as tepid data softened DXY & UST yields

• U.S. Jul PPI +4.7% y/y (poll +4.9%), initial jobless claims 209k (poll 202k)

• U.S.-Iran stalemate over Strait of Hormuz continues, no resolution in sight

• AUD flat wtd, 0.7090 resistance zone pivotal for medium-term direction

• U.S Jul retail sales due Fri, Reuters poll consensus +0.1% m/m

• RBA Deputy Governor Hauser speaks in Brisbane Wed, AU Jul jobs data due Thur

• Overnight range 0.7046-67 support 0.6920 0.6866, resistance 0.7090 0.7200
AUD Weekly 52-WMA

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

Goldman Sachs Research summarizes its latest projections for the Fed and ECB rates.

"In the US, we expect real GDP growth of 2.1% on a Q4/Q4 basis in 2026, reflecting subdued consumer spending growth but a boost from the Al boom via higher equity wealth as well as strong capex.  We expect the unemployment rate to end 2026 at 4.4%...We expect the Fed to leave the policy rate unchanged at 3.5-3.75% for the rest of 2026," GS nots.

"In the Euro area, we expect real GDP growth of 0.8% on a Q4/Q4 basis in 2026, reflecting resilient activity data but ongoing headwinds from elevated energy prices as well as subdued consumer confidence...We expect the ECB to deliver one more 25bp hike in September to a peak policy rate of 2.5%, although the risks are skewed toward further tightening," GS adds.

• GBP$ weakened in NY afternoon, -0.10% at 1.3483; NorAm range 1.3513-1.3484

• Despite slight yaw after UK GDP/output and US PPI data, pair remains anchored near 1.35

• UST yields off session low support slight USD bid in NY afternoon

• Next key data UK CPI Aug 19; a event but prob not a major mover given seasonal factors

• Most data moot considering the recent oil vol around Mideast conflict, MoU unraveling

• GBP$ supt 1.3475 daily low Aug 13, 1.3413/10 the 200/100-DMA area, 1.3334 Jul 30 low

• Res 1.3513 Thursday high, 1.3553 upper 30-d Bolli, 1.3610 May 10 daily high

Chart:


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

• NY opened near 1.1535 after 1.1512 traded overnight, the pair rallied early

• USD, US yields , USD/CNH fell after below estimate US July PPI

• Upward moves in stocks, gold, silver helped fuel the EUR/USD lift

• 1.1546 traded but USD buying emerged and EUR/USD fell, sat near 1.1525 late

• The pair traded up only +0.035 in NY's afternoon and a daily doji formed

• Daily RSI diverged on today's 7-session low which is encouraging for bulls

• Pair's hold above the 21- & 55-DMAs, rising monthly RSI also give bulls comfort
eurusd


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

• NY opened near 0.7055 after 0.7044 traded overnight, pair neared 0.7045 early

• A rally ensued however after US July headline PPI came in below estimates

• USD, US yields fell while stocks, gold, silver, copper moved upward

• AUD/USD turned positive, hit 0.7067 but bulls ran out of gas as USD buying took hold

• USD/CNH rallied toward flat, gold & silver moved down & stocks eroded some gains

• AUD/USD turned lower again, sat near 0.7055 late in the day, traded down -0.08%

• Techs lean bullish however; consolidation of gains off July 29 low persists

• Pair remains above 10-, 21- & 55-DMAs and monthly RSI indicates upward momentum
audusd


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

• Gold topside momentum fading after another failed break above $4400

• Sharp rally in recent weeks argues for a consolidation phase here

• Eyes on the close - a break below $4358 would print a bearish key day reversal

• Bearish key day = higher high, lower low, close under prior day’s low

• Confirmation opens the door for a move back sub-$4300
GOLD CHART


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

Morgan Stanley Research previews the US July retail sales report due on Friday.

"We forecast headline sales were flat in July on a m/m basis, as were the headline ex-autos. We expect that auto sales forecasts were up 0.2%m/m, sales of building materials were flat. In our forecast, we pencil in a decline in the sales at gasoline stations (down 1.5%m/m), and also soft restaurant sales (down 0.2%)," MS notes. 

"For the retail control, we expect a slower pace of increase than previous months at 0.2%m/m. The slowdown in labor income growth, weakness in transactions data, pull-forward of Prime Day and other competing promotions to June, all weigh on our forecast. Positive control group prices, early back-to-school spending activity, and seasonal factors all provide a mild positive boost," MS adds.

Sterling remains range-bound, as recent economic data from both the U.S. and the UK have failed to provide a strong impetus for either bullish or bearish sentiment, keeping the pair within its 1.3475-1.3556 range. Today's mixed UK GDP and output figures had little impact on the general direction of GBP/USD. Meanwhile, U.S. Producer Price Index (PPI) data, which came in slightly below expectations, offered some support to the pound, helping it recover from session lows below 1.35 to trade around 1.3510. This was accompanied by a slight dip in U.S. Treasury yields and a continued softening of Federal Reserve hike expectations. October rate futures show a 55% probability of a 25 bp Fed hike, with 24 bps priced in for the December FOMC meeting. For the Bank of England, today's UK data did little to alter the policy outlook, with a November hike still seen at 60% and a total of 27 bps of hikes priced in by the December MPC meeting.

With both the UK and the U.S. following comparable rate paths, and with the likelihood of sustained high inflation due to oil prices, we may see continued short covering by GBP speculators. This could establish a floor for the pound just below 1.35, with stronger support at the 200-day moving average of 1.3413 and the daily cloud top at 1.3399. However, without a distinct yield or growth advantage for the UK, sterling is likely to encounter resistance initially at the July 15 high of 1.3556, followed by the early-May highs in the mid-1.36s.
GBP Chart:


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

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

USD/JPY retraced sharply from its post-intervention low, reaching 159.54, around the 50% Fibonacci retracement of the 164–155 intervention move and close to 160 (100-dma). The next key retracement level is around 160.5, the 76.4% area. We do not rule out a breach of 160, largely from the USD leg of the pair, but are cautious about chasing it higher beyond this level knowing that both Japanese and US officials are on standby to defend JPY weakness.

Fundamentals have not materially changed. Wide rate differentials, Japan’s fiscal constraints and terms-of-trade pressures still argue against a durable JPY recovery. What has changed is the cost of testing official resolve. Pushing USD/JPY back toward 160 is now more expensive and reported intervention may have been absorbing a meaningful share of Japan’s readily available USD bills, even though deposits at foreign central banks and the FIMA facility remain available backstops," ANZ notes.

"Next week will bring Q2 GDP. Q1 GDP grew annualised 1.8% q/q exceeding expectations and the BoJ’s potential growth estimate of 0.7%. Continued support from government consumption and net exports will likely be a feature for Q2, although higher energy costs may see a squeeze in household budgets and consumption. National CPI figures for July are due, along with flash PMIs for August," ANZ adds.