• AUD/USD flat Wed as traders ponder Iran deterioration & CN inflation update

• CN May PPI +3.9% y/y (poll 3.8%), CPI +1.2% y/y (poll 1.3%) & -0.1% m/m

• U.S.-Iran hostilities re-escalate as Iran hits back after fresh U.S. strikes

• Brent crude +0.9% & DXY steady Wed in benign response thus far

• U.S. CPI due Wed (Reuters poll consensus +4.2% y/y), U.S. May PPI due Thur

• AUD targeting 0.6834 support zone as DXY continues to probe topside

• Range Asia 0.7016-32, support 0.6834, resistance 0.7080 0.7200 0.7283
AUD Weekly 52-WMA


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 2.1% to 15,006.2 points

• Gold sub-index slides for a fifth consecutive session

• Gold down over 1% to a more than two-month low on Tuesday, tracking broader market selloff and pressured by rising expectations of a U.S. interest rate hike this year [GOL/]

• Shares of heavyweights Northern Star Resources and Evolution Mining down 1.6% each

• YTD, AXGD down 20.3% vs a 0.9% drop in the broader benchmark

(Reporting by Jasmeen Ara Shaikh in Bengaluru)

• Fresh developments in the Middle East upped geopolitical tensions overnight

• USD bid across board on reports of fresh attacks by both Iran and US

• USD/JPY 160.06 to 160.45 EBS yesterday, Asia so far 160.35-41

• No Japan FX intervention again, difficult for MOF to attack when USD strong

• Market also lacking in volatility with recent moves gradual, sedate

• That said, JPY shorts up large recently, MOF wants to punish speculators

• Talk on rise too BOJ may have to hike more than expected 25 bps next week

• Support from 160.33 hourly Ichimoku tenkan, kijun 160.25, cloud 160.06-14

• Option expiries today 160.00 $1.8 bln, 160.25-45 $1.1 bln, 160.50 $1.2 bln

• Above between 160.70-161.05 total $720 mln, also 161.50 $701 mln

• JGB-US Treasury rate differentials on wide side, 2s @272, 10s 187 bps

• Related comments , , ,

• And , also , on US-Iran

• US markets , , ,

• On the BOJ , for more click on [FXBUZ]

USD/JPY:


USD/JPY nearby option expiries this week:

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

• NZD/USD -0.1% Wed after U.S. launches fresh attacks against Iran

• Trump fulfils retaliation threat in wake of downed Apache helicopter

• Iran torments U.S., progress on Middle East peace deal looks unlikely

• NZD targeting break below 0.5680 support, downswing will accelerate below

• CN May inflation data & U.S. CPI due Wed, U.S. May PPI due Thur

• Range NZ 0.58075-22, support 0.5680 5580, resistance 0.5990-95 0.6012
NZD Daily 55-DMA

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

• AUD/USD -0.7% from Tue 0.7071 high as U.S.-Iran deterioration weighs

• U.S. launces fresh strikes on Iran in response to downed Apache helicopter

• Trump had earlier foreshadowed retaliation, puts peace deal in doubt

• CN May inflation data & U.S. CPI due Wed, U.S. May PPI due Thur

• 0.7080 resistance tough to break from here, expect further downside pressure

• Overnight range 0.7005-625, support 0.6834, resistance 0.7080 0.7200 0.7283
AUD Daily 55-DMA

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

Credit Agricole CIB Research previews the June BoC meeting on Wednesday.

"The BoC is unlikely to make any major changes when it meets on Wednesday. The policy rate is expected to stay at 2.25% and the bank looks poised to just stick to its noncommittal stance, especially as the next Monetary Policy Report will not be published until July. There should not be any specific pushback to tightening prospects which have actually been tamed significantly since the April meeting, with just about one rate hike priced-in now by the end of the year," CACIB notes.

"Ultimately, in contrast to earlier in the year, the sizeable widening in USD-CAD rate differentials since the start of May could explain most of the rally in USD/CAD over that period. Yet, our Fed-BoC policy outlooks do not necessarily foresee more divergence from here, which could help USD/CAD to stabilise in the upper end of its 1.35/1.40 range going into the summer. That would be in line with our long-held forecast of 1.39 for mid-year, although admittedly we had initially flagged potential threats around the USMCA review as the main reason to keep the pair there, whereas so far the process has not proved overly confrontational," CACIB adds.

The dollar traded mixed against its major peers on Tuesday as a slide in U.S. tech stocks ahead of Wednesday’s CPI report and SpaceX’s market debut on Friday pressured both commodity prices and risk-sensitive currencies.

Annualized CPI is forecast to have accelerated to 4.2% in May, posing a potential challenge for a new Fed chair viewed as dovish. The risk-off bias also preceded an expected rate hike by the European Central Bank on Thursday. Oil also declined after U.S. Energy Secretary Chris Wright said Gulf shipping and Strait of Hormuz exports are rising despite stalled U.S.-Iran talks. This comes even as stockpiles in major economies near their lowest levels since at least 2003, with Middle East tensions simmering. President Donald Trump said Iran had shot down a U.S. Apache helicopter patrolling the Strait of Hormuz overnight and vowed a response. U.N. Secretary-General Antonio Guterres said he was “deeply alarmed” by the renewed escalation in the Middle East. Britain, Canada, France and Norway imposed coordinated sanctions on Israeli West Bank violence networks. China-related pressures include potential tighter Taiwan curbs on AI chip exports, new outbound investment rules hitting foreign banks, and U.S. claims that Chinese tech firms are aiding the military.

The dollar index remains under pressure after a failed break above 100 last week, though risk reversals suggest upside potential if volatility rises. USD/JPY is holding firm above 160 with a mild upside bias toward the 160.72 peak, though overbought signals and intervention risks suggest gains may be limited and choppy. AUD/USD slipped amid sliding metal prices and risk-off flows, keeping a bearish bias as technicals point to downside momentum. EUR/USD rebounded from its lower Bollinger near 1.1530 as U.S. shares trimmed losses, but a bearish longer-term head-and-shoulders pattern keep downside risks in focus despite near-term RSI support. GBP/USD held a modest upside bias near 1.3390, supported by cross flows and softer oil, but gains remain capped by Middle East tensions and a firmer U.S. policy outlook ahead of CPI.

Treasury yields were down 1 to 3 basis points as the curve steepened. The 2s-10s curve was marginally higher at +40.1bp.

The S&P 500 slid 0.59% as sinking tech shares weighed.

WTI oil fell 3.3%.

Gold dropped 1.5% and silver tumbled 4.0% though copper was little changed.

Heading toward the close: EUR/USD +0.13%, USD/JPY +0.11%, GBP/USD +0.39%, AUD/USD -0.21%, DXY -0.13%, EUR/JPY +0.23%, GBP/JPY +0.47%, AUD/JPY -0.12%.(Editing by Burton Frierson Reporting by Robert Fullem)

• NY opened near 0.7055 after AUD/UD rallied slightly overnight, rally extended early NY

• USD, US yield , oil drops helped the pair rally to 0.7062

• Selling then took hold as gold, silver & equities turned lower & USD/CNH rallied to 6.7797

• Drop intensified after Pres. Trump said Iran downed a US helicopter & US must react

• USD firmed up while stocks, gold, silver fell sharply; AUD/USD traded down to 0.7005

• Commodities & equities erodes some losses & USD softened; AUD/USD neared 0.7030 late

• Techs lean bearish; RSIs indicate downward momentum, pair traded below the daily cloud
audusd


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

Danske Research previews the US May CPI report on Wednesday.

"We forecast tomorrow’s May CPI at 4.3% y/y (Apr. 3.8%) in headline terms and 2.9% y/y (Apr. 2.8%) in core terms, slightly above consensus. The headline figure is still primarily lifted by higher gasoline prices. In monthly terms, core inflation will likely slow down (+0.3% m/m SA, Apr. +0.4% m/m SA) after the one-off technical distortion that boosted housing inflation in April," Danske notes.

"In case the CPI surprises on the top side, we would not be surprised to see markets temporarily pricing in even more hikes than we ultimately expect to materialise. Our trade recommendations for going long USD FX vis-à-vis SEK and NOK have performed well over the past week, and we continue to like both cases," Dasnke adds.

EUR/USD rallied Tuesday as the U.S. dollar, yields, and oil all declined, giving bears a squeeze. However, investors positioned for a sustained rally may be walking into a buy-the-rumor-sell-the-fact scenario heading into Thursday's ECB decision.

Markets have been pricing in roughly three 25bps ECB rate hikes over the next nine months, a view that took shape in late February and has remained largely stable since the end of April. While a 25bps hike at Thursday's meeting is widely expected, the real market mover could be ECB President Christine Lagarde's press conference. EUR/USD bulls will need a decisively hawkish tone from Lagarde to push rates markets to price in additional tightening beyond current expectations.

Some may doubt whether that hawkish signal will come. With euro zone economic growth still sluggish, Lagarde's language could fall short of bulls' hopes. Any disappointment on that front could send both rates and EUR/USD lower.

Technically, a pullback could bring the pair toward the neckline of a head-and-shoulders topping pattern on the monthly chart, sitting near 1.1425. A completion of that pattern would signal the potential for a significant and deeper decline.

Beyond the ECB, attention will quickly shift to next week's Federal Reserve meeting, where investors will be watching closely to gauge how new Fed Chair Kevin Warsh positions himself on monetary policy.
eurusd


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

Bank of America Global Research previews the June BoC policy decision on Wednesday.

"We expect the BoC to leave its policy rate unchanged at 2.25% on June 10 and to remain on hold through year-end as it assesses incoming data and monitors developments on the Iran conflict and the USMCA review. We also expect the BoC to underscore ongoing economic weakness, reflected in two consecutive quarters of contraction (Chart of the day) and a soft labor market. A negative output gap further argues against hikes, as it is helping keep core inflation contained," BofA notes.

"At the same time, we expect the BoC to acknowledge the risk that inflation could remain persistently high, driven by elevated oil prices. Forward guidance should reflect these risks with a cautious tone, while continuing to emphasize flexibility and adaptability as the effects of higher oil prices become clearer and the USMCA review progresses. Rates rallied and curve steepened in recent weeks as market priced out near-term hikes," BofA adds.

By Justin McQueen

June 9 (Reuters) - Bitcoin is undergoing its deepest drawdown from a rolling 1-year high since 2022, now down over 50% from the $125,000 peak. Recent price action has turned more disorderly, with losses accelerating to around 15% month-to-date, which accounts for more than half of the year-to-date decline of 28%.

The latest leg lower was triggered by headlines that Strategy – formerly MicroStrategy – had reduced its Bitcoin holdings. While the sale itself was small – 32 BTC – the signalling effect was more material given the firm’s long-standing “never sell” stance. Subsequent disclosure of renewed buying has done little to stabilise sentiment, with the market instead focusing on the shift in narrative.

Looking at prior cycles, the current drawdown has already exceeded the long-run average of around 38% since 2014. A move in line with the more severe episodes in 2018 (-83%) and 2022 (-77%) would imply downside towards the $22,000–$28,000 range.

However, the macro picture remains key. Both 2018 and 2022 drawdowns coincided with an active tightening cycle from the Federal Reserve. While we are not currently in a hiking phase, the recent repricing in inflation expectations alongside a firmer labour market has reintroduced upside risks to the rate path. Should the Fed shift toward signalling that policy tightening is on the table, this would likely reinforce downside in Bitcoin and raise the probability of a deeper, cycle-like drawdown.

In the short-run, BTC is testing the 200-week moving average at 61,976, which is a level that has historically acted as key structural support and will be closely watched for signs of base formation.
BTC drawdown


btc vs 200week ma


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

Morgan Stanley Research previews the US May CPI report on Wednesday.

"We see core CPI at 0.22% m/m (2.8% y/y), slowing from 0.38% m/m in April, driven by deceleration in core services alongside still-positive core goods inflation. The step-down in core is largely explained by easing shelter inflation," MS notes.

"Core goods inflation remains positive-tariff pass-through is not yet complete although its impact is gradually fading. Headline CPI is expected to rise 0.56% m/m and 4.3% y/y, outpacing core on the back of further increases in gasoline prices in May. Absent additional gains in oil prices, headline inflation should begin to trend lower in June. Our forecasts are consistent with core PCE prices rising 0.24% m/m and stalling at 3.3% y/y in May. Headline PCE prices would rise 0.43% m/m and 4.0% y/y," MS adds.

Goldman Sachs Research previews the US May CPI report on Wednesday.

"We forecast that the core CPI rose a soft 0.17% in May (vs. consensus +0.3%) and 2.79% year-over-year. We expect benign 0.22% increases in rent and OER, another large increase in airfares (2%) due to higher jet fuel prices, and downward pressure from residual seasonality on the communication categories," GS notes.

"We forecast that headline CPI rose 0.45% in May and 4.17% year-over-year, up from 2.43% in February. Our forecast is consistent with a larger 0.27% increase in core PCE prices in May, which will get a boost from the impact of higher equity prices in April on financial services," GS adds.

• Cable eyes 1.34 after extending north from 1.3331 (Asian session low)

• 1.34 is a former support point (1.3407 was June 1 low)

• Ascent towards 1.34 spurred by global stock gains (GBP is risk-sensitive)

• 1.3420 (200-day moving average) is a resistance level beyond 1.3400

• Last Friday's high was 1.3483 - before USD jumped on strong U.S. jobs data

• BoE warns of scams after fake video shows brawl with Reform UK's Farage

GBPUSD


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

• Overnight expiry options now include Wednesday's US CPI data - arguably more important after Fri's NFP surprise

• However, overnight expiry USD/JPY implied volatility has traded below 6.0 - remarkably cheap for any event risk of late

• Premium/break-even for a straddle just 40 JPY pips in either direction - already low pre NFP at 53 JPY pips

• USD/JPY is well contained at 160.00 as intervention threat caps, but this premium still looks notably underpriced

• Dealers point to long gamma from more expiring trigger type options in the mid 160.00's as the likely culprit

• Long gamma typically pressures near dated implied volatility and helps to suppress realised volatility

• With vol this cheap, it wouldn't take much realised volatility to reward option holders hedging CPI data risk
Overnight expiry USD/JPY FXO implied volatility


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

• Japan issues a warning on yen, bond yields as fiscal pressure mounts

• However, USD/JPY looks set to test Japan's resolve

• USD/JPY has seen a 160.06-160.29 range, on Tuesday, EBS data shows

• There is scope for a 2026 160.72 high retest, April 30 peak when Japan intervened in yen

• It remains above the tenkan support line that currently comes in at 159.69

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

Daily Chart


Correlation Chart


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

EUR/USD hit new lows since March 31 at 1.1500 early Monday but failed to close below the key 76.4% Fibonacci retracement of the March-April rally from 1.1409 to 1.1849 at 1.1513. That failure and subsequent recovery to the 1.1550s, is what technicians call a bear trap — and it has offered bulls some encouragement, but the options market is not yet convinced.

The options market tells a more cautious story. Implied volatility spiked as EUR/USD key supports and daily lows from mid-late May at 1.1587-77 gave way in the wake of Friday's big NFP data beat. The Benchmark 1-month implied volatility climbed from 5.0 pre-NFP to a peak of 5.85 early Monday, before easing back to 5.5 as the spot price settled higher. However, more tellingly, the 1-month 25-delta risk reversal — which measures the implied volatility premium for EUR puts over calls — rose from 0.25 before NFP to 0.625 on Tuesday, a new high since early April, despite the mild spot recovery.

That measure of perceived downside risk is reinforced by outright demand for EUR put/USD call strikes, too. On Monday there was a pick-up in demand for 1-3-month expiry EUR put options with strikes as low as 1.1200. These would benefit from deeper EUR/USD losses, especially if accompanied by renewed implied volatility gains.

With markets likely to stay sidelined ahead of Wednesday's U.S. CPI, and the June 17 Fed meeting increasingly viewed as the key near-term USD risk event, a clearer directional signal may have to wait. For now, the bear trap may have been sprung — but bulls still have plenty to prove and options are not relaxing their risk premiums for any renewed EUR/USD weakness.
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


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

• EUR/USD hit new lows since March 31 at 1.1500 early Monday, but has since recovered to the 1.1550's

• 1.1513 is 76.4% Fibo retracement of the March-April rally from 1.1409-1.1849 - bears needed a close below

• Failure to close below key a technical level and subsequent bounce is called a bear trap - often a bullish signal

• Bullish EUR/USD and renewed USD weakness aligns with Morgan Stanley's latest FX strategy note

• 1.1553-28 is Tuesday's range - regaining prior supports at 1.1577-87 may ease fears of deeper declines

• Big FX option strikes at 1.1500 and 1.1550 can help contain range into the 10-am New York cut expiry

• Markets may remain sidelined ahead of Wed's US CPI, but June 17 Fed now seen as key near term USD/FX risk
EUR/USD daily chart (EBS)


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

• AUD/USD rises to 0.7071 as Asian stock gains buoy risk-sensitive AUD

• Kospi closes up 8.18%. 0.7071 is seven pips shy of Monday's peak

• Monday's peak was scaled after Iran and Israel halted attacks on each other

• 0.7016 was Monday's two-month low, as Asian stock losses weighed on AUD

• Friday's high was 0.7144 - before USD jumped on strong U.S. jobs data

• RBA rate hold expected next week (June 16), before Warsh chairs first Fed meeting

AUDUSD


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

• Cable rises to 1.3374 as risk-sensitive pound benefits from Asian stock gains

• 1.3374 is the highest level since Monday's three-week low of 1.3307

• Monday's high was 1.3368, after Iran and Israel halted attacks on each other

• Offers might emerge near 1.34 (former support point) if GBP/USD extends north

• Friday's high was 1.3483 - before the dollar jumped on strong U.S. jobs data

• M&A news: UK's GSK to buy US-listed Nuvalent for $10.6 billion

GBPUSD


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

• AUD/USD flat Tue as markets seek clarity on confusing Middle East situation

• CN May trade balance $105.4 surplus, beats expectations of +$92.1 bln

• U.S. pressure on Iran & Israel to stop attacks yields mixed results

• Israel's maritime navigation in the Red Sea at risk of Houthi intervention

• Former 0.7080 support now becoming resistance; downside extension likely

• Westpac Jun consumer sentiment 80.6, one of the worst results on record

• CN May inflation data & U.S. CPI due Wed, U.S. May PPI due Thur

• Range Asia 0.70345-59, support 0.6834, resistance 0.7080 0.7200 0.7283
AUD Daily 55-DMA


DXY Daily 55-DMA

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

June 9 (Reuters) - USD/JPY players appear to be hunkering down for more range trading, this time around 160.00. The pair hit a high of 160.39 EBS on Monday, and the market is preparing for consolidation around 160.00, much like the situation from mid-May when USD/JPY consolidated around 159.00. The threat of Japanese FX intervention has weighed on the markets since mid-May, and will likely continue to limit and slow upside moves. The lack of recent intervention may reflect reduced speculative interest in USD/JPY as trading accounts shifted their attention to equities, which have shown more volatility and profitability. The Mrs Watanabes of Japan and perhaps the world are more actively trading Japanese equities. Anecdotal evidence suggests younger players, including high-school and college students, are joining the herd of day-traders, upping the overall involvement in stock trading, looking to boost disposable income and tuck money away for the future. Tokyo FX speculative trading has therefore ebbed, aside from some carry interest. This has not resulted in less USD buying out of Tokyo however. Solid, continuous demand persists from Japanese importers facing higher import costs, exacerbated by geopolitical developments, and this shows no signs of letting up. To wit, such demand has been apparent at most Tokyo fixes for over a year . Barring actual Japanese intervention, USD/JPY will likely consolidate around 160.00 with the bias remaining to the upside. Massive importer option barriers are tipped at 162.00 and especially 165.00, and could be potential points of contention going forward.

Related comments , , , , .
USD/JPY:


Nikkei 225:

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

• AUD/USD +0.1% Tue, although broader sentiment retains negative bias

• Pair may struggle to retake 0.7080; move toward 0.6834 support possible

• Westpac Jun consumer sentiment 80.6, one of the worst results on record

• Trump's pressure on Iran & Israel to stop attacks moderately successful

• Yemen's Houthis vowing to block Israeli maritime navigation in the Red Sea

• CN May trade balance due Tue, Reuters poll consensus $92.1 bln surplus

• Range Asia 0.70345-52, support 0.6834, resistance 0.7080 0.7200 0.7283
AUD Daily 55-DMA

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