• Apparent break from long-held range followed by swift return to its centre

• EUR/USD drop to 1.0125 appeared to signal break lower from 2023-2024 ranges

• 1.0448-1.1276 extremes in 2023-24 and most trade conducted 1.05-1.10

• The centre of prior extremes is 1.0862

• Mid-point of 1.2349-0.9528 drop seen during US tightening cycle is 1.0938

• Recent annual trading range have been amongst smallest on record

• Influence interest rates may grow encouraging traders to sell short

•
EUR/USD

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

• USD/JPY up 0.2% in Asia buoyed by Fed's steady-for-longer stance on rates

• Initial dip to 148.585 on sticky Japan core CPI not sustained

• Japanese demand lifts dollar to 149.19 high before rally runs out of steam

• Pair drifts lower to 149.00, consolidates ahead of Europe open

• USD upside limited as sticky Japan inflation keeps alive BOJ rate-hike bets

• US-Russia talks on Ukraine war in Jeddah on Sunday is a risk event

• Resistance 149.15-20, 149.40, 149.70; support 148.50-60, 148.15-20
JPY:

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

• AUD/USD cedes ground, down 0.5% for week, March gain pared to 1.4%

• Risk-averse mood builds as chorus of central banks flag uncertainty

• Important 0.6260 support at risk, break to trigger stop-loss selling

• AU Feb CPI due March 26 (Reuters poll 2.5% weighted CPI y/y)

• RBA meeting Mar 31-Apr 1 comes into focus, no OCR change expected

• AUD range Asia 0.62865-0.6306, support 0.6260, resistance 0.6390 0.6415
AUD eod

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

• USD/JPY up 0.25%, buoyed by steady-for-longer Fed but resistances loom

• Upside limited as JP core CPI remains sticky, keeps alive BOJ rate-hike bets

• Trade war uncertainty and risk aversion likely to buoy JPY

• US-Russia talks on Ukraine war in Jeddah on Sunday is a risk event

• Test of initial resistance at 149.15-20 underway, more at 149.40 and 149.70

• Support 148.60, 148.15-20; Asia range 148.585-149.19
JPY:

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

• AUD/USD enters consolidation phase as traders reduce risk before weekend

• Economic uncertainty from trade/geopolitical turmoil dampens risk assets

• Global investment banks revise China GDP higher, stimulus may support AUD

• AUD/USD just above 55-DMA; needs to hold 0.6260 to maintain upswing

• Key inflection: AU CPI due March 26 (Reuters poll 2.5% weighted CPI y/y)

• Range early Asia 0.62955-0.6306, support 0.6260, resistance 0.6390 0.6415
AUD midday

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

• USD/JPY erases early losses on Japanese demand, trades flat

• Japan markets back from Thu holiday, react to Fed's caution on rates

• Fed's balancing act gives respite to tariff-struck investors

• Upside limited as Japan inflation remains sticky

• Core inflation hits 3% in February, keeps alive BOJ rate-hike bets

• Resistance 149.00, 149.20-25, support 148.50, 148.15-20

• Asia range 148.585-149.00
Fed dot plot:

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

• USD/JPY eases slightly as Japan's Feb core CPI rises more than expected

• Japan Feb core CPI up 3.0% yr/yr vs 2.9% expected but down from 3.2% in Jan

• BOJ already cautiously hawkish, data will raise rate hike expectations

• Safe haven JPY resilient to broad USD strength Thu as Fed cites uncertainty

• EUR/JPY -2% from Tue high, had gained 6% from Feb low on German debt brake

• AUD/JPY down 0.85 Thu on soft Australian jobs data

• USD/JPY support at 148.20 and 147.92 which is 61.8% of 146.54-150.15 rise

• Resistance 148.90-149.00, 149.20; Thu range 148.18-148.955

• Asia Friday range 148.585-148.80
Fed officials see slow growth in Trump's 'golden age':

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

• EUR/USD fell 1.3% from Tue's 1.0955 high amid building risk-off sentiment

• ECB & BoE join the Fed in citing increasing uncertainty on economic outlooks

• Euphoria over the passing of Germany's spending package continues to fade

• EUR consolidating, but will require renewed USD weakness to extend rally

• Euro zone consumer confidence due Fri (Reuters poll -13.0, prior -13.6)

• Range 1.081475-1.0917, support 1.0805 1.0765, resistance 1.0955
EUR mng

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

Synopsis:

ANZ maintains its NZD/USD forecast at 0.55 for H1 2025, with an expected recovery in H2 as excessive short positioning unwinds. While falling US bond yields and weakening US exceptionalism have supported the NZD, near-term risks remain due to tariff uncertainty and weak risk sentiment. The direct impact of US tariffs on New Zealand exports is minimal, and the NZD is likely to act as a shock absorber. Markets have largely shrugged off the RBNZ’s February rate cut and Governor Adrian Orr’s resignation, focusing instead on broader monetary policy stability.

Key Points:

1️⃣ NZD/USD Stuck in Range, Forecast Remains at 0.55 📉

• Current range: 0.56-0.5750.
• Forecast: 0.55 in H1 2025, rising thereafter.

2️⃣ Near-Term Caution Due to Tariff Uncertainty & Risk Sentiment ⚠️

• US tariffs have minimal direct impact on NZ exports.
• NZD likely to act as a shock absorber amid trade risks.
• Weak global risk appetite may weigh on NZD near-term.

3️⃣ Market Shrugs Off RBNZ Rate Cut & Orr’s Resignation 🏦

• February's 50bp rate cut had little FX impact as it was widely expected.
• Orr’s resignation also had a muted reaction, with focus shifting to policy continuity.
• Terminal OCR expected at 3.00%, below the RBA (3.85%) and Fed (3.75%), reducing NZD’s rate appeal.

4️⃣ H2 2025 Recovery Expected as Short Positioning Unwinds 🔄

• NZD/USD positioning is net short by a record margin (CFTC non-commercial data).
• Potential for a short squeeze to drive NZD/USD back toward 0.59.

Conclusion:

ANZ remains cautious on NZD/USD in the near term due to trade risks and weak sentiment, but expects a recovery in H2 2025, driven by short covering and a return to fair value (~0.59). Monetary policy stability and easing US exceptionalism should also help NZD regain strength later in the year.

• AUD/USD traded lower overnight as soft AU jobs data weighed and USD firmed

• U.S. treasury yields pared recent losses on Fed stating no rush to cut rates

• U.S. data showed no sharp economic decline, home sales beat, jobless steady

• AUD -1.5% from Thur high before recovering towards 0.6300 NY afternoon

• The pair sitting just above 55-DMA, consolidation phase likely Fri

• Key inflection: AU CPI due March 26 (Reuters poll 2.5% weighted CPI y/y)

• Overnight AUD range 0.62705-0.6341, support 0.6260, resistance 0.6390 0.6415
AUD mng

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

March 20 (Reuters) - The dollar index advanced on Thursday due to monthly hedging flows and haven-related purchases, driven by a decline in risk appetite after this week's central bank meetings. The Bank of England joined other central banks in highlighting significant economic uncertainty and worries about ongoing high inflation. Treasury yields trimmed earlier losses as new data on jobless claims, the Philadelphia Fed survey, and home sales indicated that U.S. growth was not deteriorating sharply. Nonetheless, anticipation of future Fed cuts makes dollar bulls reluctant to establish long positions, as decreased government spending and tariffs are projected to slow growth.

GBP/USD remained lower after Bank of England policy makers, in an 8 to 1 vote, held interest rates at 4.5% and warned against the expectation that interest rates would be reduced in the coming meetings. Bank of England Governor Andrew Bailey said the central bank would have to be prudent about cutting rates because the fall in inflation has been very gradual.

Policymakers will have to account for expected government spending cuts once finance minister Rachel Reeves' gives her budget update next Wednesday.

Futures data suggests long positions have likely been trimmed as cable flirted with 1.30. Further weakness would see the pound test support at the 1.2901 March 5 high and rising 21-day moving average at 1.2822, whereas a move above the 1.3046 November 6 high hints at an inverse head and shoulders continuation to 1.34.

EUR/USD declined for the second day, mirroring the DAX's weakness as optimism regarding German spending shifted to concerns about U.S. tariffs and ongoing fighting in Ukraine. European Central Bank President Christine Lagarde said a 25% U.S. tariff on European imports and EU retaliatory measures would lower euro zone growth about half a percentage point in the first year. She stressed, however, that any estimates of the cost of a trade war were subject to considerable uncertainty.

EUR/USD is declining from an overbought position, with the descent moderating as it approaches the 1.08 level. This level represents the base of a bullish flag pattern and coincides with the expiration of EUR1.5 billion in options on Friday. Further corrective losses will see EUR/USD revisit its 200-day moving average at 1.0724, while a move above the March high of 1.0954 is bullish. The Swiss franc weakened after the Swiss National Bank cut its main interest rate to 0.25%, while Sweden's central bank kept its policy rate at 2.25%. SNB Chairman Martin Schlegel said the bank will continue to use foreign currency market interventions if necessary.

USD/JPY reversed its loss, tracking Treasury yield movements after U.S. data pointed to stable growth. The pair needs to eclipse 149 to challenge newly established short positions after Wednesday's Fed. The session low is just above a bear reversal high set on March 11 at 148.12.

Tokyo will eye nationwide CPI for February on Friday while Sydney traders digest Australian trade data. Bank of Canada Governor Tiff Macklem said that uncertainty over the effect of U.S. tariffs meant the bank had to change the way it conducted monetary policy to become less-forward looking than normal. There are $4 billion of 1.4280-1.4300 USD/CAD options expiring Friday, and the pair held above that range in trade in Thursday.

Treasury yields were down 1 to 2 basis points. The 2s-10s curve was up about 1 basis points to +27.6bp.

The S&P 500 rose 0.40% due to tech weakness. Oil rose 1.7% after OPEC+ issued a new production schedule.

Gold and copper were little changed on the session.

Heading toward the close: EUR/USD -0.48%, USD/JPY +0.07%, GBP/USD -0.32%, AUD/USD -0.88%, =USD +0.44%, EUR/JPY -0.39%, GBP/JPY -0.21%, AUD/JPY -0.79%.(Editing by Burton Frierson Reporting by Robert Fullem)

• NY opened near 0.6290 after 0.6364 traded in Asia, slide extended early

• 0.62705 hit when US yields firmed after claims, Philly Fed data

• USD/CNH rally above 7.2550, gold drop, copper slip from high added weight

• AUD/USD bounced as US$ buys abated & AUD/JPY rallied off its low

• AUD/USD sat near 0.6295 late, traded down -1.02% in NY's afternoon

• Drop below 10- & 21-DMAs, falling daily RSI are concerns for longs
audusd

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

Synopsis:

ING remains bullish on the USD following the March FOMC meeting, seeing no reason to change their call for two 25bp Fed cuts in 2025. The Fed’s reduction in quantitative tightening (QT) and Powell’s downplaying of recession risks supported US equities, but the rotation from US to European stocks—which had fueled EUR/USD gains—is fading. Looking ahead, key US data risks and the start of universal tariffs on April 2nd could provide fresh upside for the USD.

Key Points:

1️⃣ No Change in Fed Cut Expectations for 2025 🏦

• ING maintains its call for two 25bp cuts in 2025.
• March FOMC did not alter the fundamental USD outlook.

2️⃣ USD Bullish Case Still Intact 💵

• QT slowdown and Powell’s recession comments supported equities, but not enough to weaken the USD.
• US-to-Europe stock rotation is fading, reducing support for EUR/USD.

3️⃣ Upcoming US Data Risks Key for USD Direction 📊

• Jobs data and core PCE will test market pricing of Fed cuts.
• A lack of immediate deterioration in US data would keep USD strong.

4️⃣ April 2nd Universal US Tariffs a Key USD Catalyst 🚨

• Tariffs could drive further USD upside as markets price in trade risks.
• Protectionist policies tend to support USD demand.

Conclusion:

ING remains bullish on the USD, seeing limited downside post-FOMC and fading drivers for EUR/USD strength. The April 2nd US tariff rollout could provide another leg of support for the greenback, with key US data risks in focus before then.

• Modest pullback in EUR/GBP, having ran out of steam at 0.8450

• A touch more hawkish BoE decision allowed the move to extend

• However, UK budget risks matter more, which leans GBP negative

• Thus, EUR/GBP dips should find support into 0.8335-50 (100/55-day MAs)

• Reeves to reveal biggest spending cuts since austerity in budget

• This highlights the fiscal divergence between UK and Germany

• German upper house to vote Friday on fiscal reform. Expected to pass

• In turn, case for EUR/GBP upside remains
EURGBP daily chart

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

Synopsis:

Credit Agricole has upgraded its GBP/USD forecast, now expecting the pair to rise to 1.35 by Q4 2025 and 1.36 by Q4 2026. However, the bank is less bearish on EUR/GBP, citing a more resilient Eurozone economy and a less dovish ECB. As a result, EUR/GBP is expected to hover around 0.83 for most of 2025 before gradually drifting lower to 0.81 in 2026.

Key Points:

1️⃣ GBP/USD Forecast Upgraded 📈

• New target: 1.35 (Q4 2025), 1.36 (Q4 2026).
• Reflects improved UK outlook and relative USD weakness over time.

2️⃣ EUR/GBP to Remain More Resilient in 2025 💶➡️💷

• Less bearish view on EUR/GBP due to Eurozone economic resilience.
• Less dovish ECB outlook keeps EUR/GBP stable near 0.83 for most of 2025.

3️⃣ Gradual Downtrend in EUR/GBP Expected in 2026 📉

• EUR/GBP projected to drift lower toward 0.81 as the UK gains relative strength.

Conclusion:

Credit Agricole raises its GBP/USD forecast, expecting a move to 1.35 by late 2025 and 1.36 by 2026. However, the EUR/GBP outlook remains less bearish, with the pair staying around 0.83 in 2025 before trending lower to 0.81 in 2026. The Eurozone’s economic resilience and ECB policy stance keep EUR/GBP supported in the near term.

Sterling is outperforming other major currencies in Thursday's trading, supported by a more hawkish-than-expected BoE rate hold, despite weakening slightly after the Fed's hold on Wednesday, and still poised for further gains beyond its nearby 2025 high. The dollar's uptick appears driven by haven buying after the overnight equity and risk selloff with long-end Treasury yields dropping, despite the Fed's repeated no-rush-to-cut stance. Fed Chair Jerome Powell's comments on high economic uncertainty further support haven demand for Treasuries and by extension the dollar. So, given inflation and rate uncertainty amid steady Fed and BoE rate expectations, the one constant remains uncertainty as both central banks have noted they expect rates to remain steady. Thursday's BoE rate hold came with a surprise vote of 8-1 to hold versus a forecast of 7-2, and the BoE warned against assumptions that rates would be cut over the meetings. With Fed and BoE rhetoric touting similar policy expectations, markets must wait to see who moves first. Currently, LSEG's IRPR predicts three Fed cuts in 2025 versus two from the BoE. If these expectations hold, GBP/USD is likely to continue its upward trend, with resistance near 1.30 potentially giving way to October highs above 1.31 and September peaks above 1.34.
GBP Chart:

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

Synopsis:

Goldman Sachs has revised its USD/JPY forecasts lower, citing growing downside risks to the US economy and higher policy uncertainty. The bank notes that diminished US exceptionalism is a meaningful risk to USD strength, and in periods of heightened concern over US growth, the JPY tends to outperform. With lower yields and weaker equities reducing USD upside potential, the range for USD/JPY has now shifted lower, limiting further gains unless uncertainty subsides.

Key Points:

1️⃣ USD/JPY Range Has Shifted Lower 📉

• Increased US economic uncertainty is weighing on USD.
• The yen typically outperforms when US yields and equities decline.

2️⃣ US Growth Risks & Policy Uncertainty Support JPY Strength 🇯🇵

• Higher policy uncertainty is reinforcing safe-haven demand for JPY.
• Market sentiment toward US growth remains fragile, adding to yen appeal.

3️⃣ Updated USD/JPY Forecasts 🎯

• New projections: 150 (3M), 151 (6M), 152 (12M).
• Previous forecasts: 152, 154, 156.
• More limited USD/JPY upside unless policy risks ease.

Conclusion:

Goldman Sachs sees growing downside risks for the USD, prompting a lower revision in USD/JPY forecasts. With weaker US growth expectations, policy uncertainty, and falling yields, the yen is likely to remain strong, capping further upside for USD/JPY.

• USD/CAD bounces back as dollar pares Fed drop, risk sentiment sours

• Canadian PM Carney expected to call snap election for Apr 28

• Dollar shorts are in a tricky position

• USD/CAD nears 1.44, though key resistance sits at 1.4500-40

• U.S. tariffs continue to pose a threat to the currency

• In turn, dips in the pair continue to find good demand

• Support resides 1.4253 (100DMA), 1.4180

• With political risks on the rise, this supports USD/CAD upside
USDCAD daily chart

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

• Cable hits 1.2946 after extending south from 1.3015 (19-week high in Asia)

• 1.2946 is lowest level since Monday (1.2926 was low that day)

• Drop to 1.2946 spurred by USD demand; GBP/EUR up to 1.1943 (two-week high)

• BoE rate hold expected at 1200 GMT; at least two MPC members to vote for cut

• The consensus forecast is that the BoE will reduce rates on May 8

• UK pay growth, excluding bonuses, up 5.9% in 3 months to Jan YY, as expected

GBPUSD

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

March 20 (Reuters) - Foreign exchange traders can use a simple option strategy to insure against a bigger EUR/USD setback, as the currency pair has faltered ahead of major technical resistance.

Germany's parliament approved plans for a massive spending surge on Tuesday, throwing off decades of fiscal conservatism in the hope of reviving economic growth and scaling up military spending for a new era of European collective defence.

EUR/USD had reached its highest levels in more than five months, hitting 1.0955 ahead of the German vote. However EUR/USD was capped by the major 1.0957 Fibo, a 76.4% retrace of the 1.1214 to 1.0125 (September to February) EBS drop. That increases the risk that the euro could be set for a much bigger relapse in the days and weeks ahead.

Those who want to insure against a bigger EUR/USD fall can buy a one-week 1.0860 EUR put option at a cost of 44 pips, priced with spot at 1.0867. Profit potential is unlimited if spot is below the 1.0816 breakeven point at the March 27 expiry, while losses are limited to the 44 pips premium paid.

For more, click on [FXBUZ]

Weekly Chart:


Fenics Options Pricing Grid:

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

• Traders betting EUR/USD rises about to get bullish signals

• 20-DMA set to rise over 200-DMA, 55-DMA above 100-DMA - Golden Crosses

• Top 20-week Bollinger Bands is 1.0876

• Speed and size of March gains saw rally stretched - pullback likely

• The 200-DMA at 1.0725 likely limit for dips in the near-term

• The 200-DMA also lies close to centre of 2023-2024 range - neutral spot

• Potentially EUR/USD could settle, become trapped, in the old range

• Extremes traded 2023-2024 - 1.0448-1.1276, most trade within 1.05-1.10

•
EURUSD

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

• Cable falls to 1.2963 after UK pay growth comes in fraction below forecast

• 5.8% vs 5.9% f/c. 1.2963 = intra-day low. 1.2986 was low just before UK data

• Bids likely pre-1.2950 (1.2956 was Wednesday low; 1.2953 was Tuesday low)

• 1.3015 was new 19-week peak in Asia (1.3010 = Tuesday/Wednesday high)

• BoE rate hold expected at 1200 GMT; at least two MPC members to vote for cut

• UK fiscal update next week. Fed in no rush to cut rates; Trump disagrees

GBPUSD

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

• Shares of New Murchison Gold fall 5.9% to A$0.016

• Stock set for its weakest session since March 5, if current losses hold

• The mineral explorer receives commitments to raise A$16.5 million ($10.47 million) by issuing 1.3 million shares at A$0.013 per new share

• Placement price represents a 23.5% discount to stock's last close

• About 72.1 mln shares change hands, 3.6x the 30-day average of 20 mln

• NMG stock up 77.8% YTD, including current session's moves

($1 = 1.5763 Australian dollars)

(Reporting by Manasi Dasa in Bengaluru)

Synopsis:

Both Morgan Stanley and BofA expect the BoE to hold rates at 4.50% during Thursday’s March policy meeting, with a split vote but no immediate policy shift. Morgan Stanley sees a 6-3 vote, while BofA expects a 7-2 vote, with Dhingra and Mann voting for a cut. While the gradual and careful approach remains in place, recent hawkish data, inflation forecasts, and shifting dovish members turning more neutral suggest that the BoE will stick to its cautious stance. Both banks continue to expect the first rate cut in May.

Key Points:

1️⃣ BoE Expected to Hold at 4.50%, With a Split Vote 🏦

• Morgan Stanley: 6-3 vote for no change.
• BofA: 7-2 vote, with Dhingra & Mann voting for a cut.

2️⃣ Dovish Members Turning More Neutral 🔄

• Taylor and Ramsden, previously leaning dovish, now more neutral, supporting a gradual approach.
• No urgent shift in policy expected despite market pricing for cuts.

3️⃣ "Gradual and Careful" Policy Remains the Baseline 📉

• BoE added "careful" to its February statement, signaling uncertainty.
• Hawkish inflation forecast revisions & supply-driven growth weakness reinforce the hold decision.

4️⃣ Next Rate Cut Still Expected in May 📆

• Morgan Stanley & BofA still forecast the first rate cut in May.
• Near-term risks skew hawkish, but easing is still expected later in 2025.

Conclusion:

Both Morgan Stanley and BofA expect the BoE to hold at 4.50%, with a split vote but no urgency to shift policy. The cautious approach remains intact, with dovish members turning neutral and inflation concerns keeping cuts on hold for now. The first rate cut is still expected in May, but hawkish near-term risks persist.