• Oversold conditions were one of the main restraints on this week's drop

• That stretched situation has since been alleviated

• Over $10billion was staked on a rise last week weighing on euro

• Traders - encouraged by support ahead 1.10 holding - likely bought the dip

• Others betting on a rise may have been encouraged to hold existing longs

• Trade truce lessens need to hold safer euros which was main basis for longs

• Euro may be negatively influenced by interest rates in future

•
EURUSD

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

• Offers pre-1.3322 keep lid on cable after ascent extension from 1.3140

• 1.3322 was last Friday's high (May 9). 1.3140 was Monday's four-week low

• Rise to threaten 1.3322 influenced by cooler than expected U.S. CPI data

• More offers likely pre-1.3350 (1.3345 was high after hawkish BoE cut, May 8)

• BoE MPC hawk Mann says UK labour market more resilient than thought

• China criticises UK trade deal with US, FT reports (deal agreed last week)

GBPUSD

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

• Steady at the base of a quiet, tight 1.3299-1.3320 range on FX Matching

• Recent BoE comments reflect very different outlooks from Taylor and Pill

• Opposing views are no great surprise amid the confusion caused by US tariffs

• No major UK data, BOE Deputy Gov Sarah Breeden speaks - uncertainty reigns

• Charts - mixed 5, 10, & 21-day moving averages, momentum studies conflict

• 21-day Bollinger bands contract - the daily charts are back in neutral

• Under pressure 1.3306 21-DMA, then last week's 1.3402 high first resistance

• Bears need a close below the resilient 1.3165, 0.3825 of the April rise
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Yen up against USD in Asia but remained on back-foot in the JPY crosses

• USD/JPY 147.66 to 147.01 EBS, back below 147.60-149.97 daily Ichimoku cloud

• Seems brief foray into cloud Monday-Tuesday rejected

• USD/JPY back in 146.73-147.69 hourly Ichimoku cloud, break below bearish

• Japanese exporters again good sellers with budgets assuming 147+ this FY

• Other players also noted selling, exuberance over US-China trade truce over?

• Softer US yields helping USD lower, JGB yields soft too in sympathy

• Option expiries not much of factor, nothing massive in immediate vicinity

• JPY crosses showing some weakness but generally more buoyant

• EUR/JPY 165.13 to 164.60 EBS, off but not far below 165.20 high yesterday

• GBP/JPY 196.41 to 195.60, high today best since 197.53 on January 8

• AUD/JPY 95.56 to 95.15, high yesterday 95.63 and best since 95.74 March 18

• Related comment , also , on JPY crosses

• On Japan data , BOJ comment
USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

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

• +0.1% in a tight range in Asia, as markets digest recent volatility

• China issued it's first rare earth magnet export permits since April

• Volkswagen suppliers on the list - critical materials will continue to flow

• Good news for VW and potentially for other Eurozone manufacturers

• Charts- 21-day Bollinger bands expand, 5, 10 & 21-day moving averages slip

• Daily momentum studies conflict - a bearish setup remains despite the bounce

• A close above the 1.1324 21-day moving average would end the downside bias

• Monday's 1.1065 low then 1.1053 0.618% of the Mar/Apr rise are first support

• This week's 1.1242 high, then last week's 1.1380 top are initial resistance

• 1.1175 1.494 BLN and 1.1200 952 mln close strikes for May 14th
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• JPY crosses remain very buoyant despite USD/JPY back-tracking lower

• Suggests Tokyo, other centres not as bullish on yen as in recent past

• That said, seems market not ready to turn to a bullish USD view

• Tokyo and players in other centres taking middle way, buying JPY crosses?

• EUR/JPY 164.85-165.13 EBS in Asia so far, near 165.20 high yesterday

• High yesterday best since 165.29 on Nov 8 '24, peak then 166.65 Oct 31

• GBP/JPY 195.95-196.41, best since 197.53 on Jan 8 earlier this year

• AUD/JPY very well bid as of late, 95.28-56 after rally to 95.63 yesterday

• 95.63 just shy of 95.74 high on Mar 18, 96 try in cards?

• Cross on hold for now between its 100/200-DMAs at 94.49/96.58

• On EUR/JPY , USD/JPY , for more click on [FXBUZ]

EUR/JPY:


GBP/JPY:


AUD/JPY:

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

• Steady after closing up 1%, back at familiar levels with the USD off 0.75%

• UK's Reeves and Bailey hope the new repo system will make money for the BoE

• No major UK data, BOE Deputy Gov Sarah Breeden speaks - uncertainty reigns

• Trump's Middle East tour will generate plenty of news if Tuesday is a guide

• Charts - mixed 5, 10, & 21-day moving averages, momentum studies conflict

• 21-day Bollinger bands contract - the daily charts are back in neutral

• Under pressure 1.3306 21-DMA, then last week's 1.3402 high first resistance

• Bears need a close below the resilient 1.3165, 0.3825 of the April rise
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Steady early after closing up 0.9% with the U.S. dollar off 0.76%

• The Euro recovered most of Monday's post-U.S.-China tariff cut deal

• Ukraine's Zelenskiy insists on face-to-face talks with Putin in Istanbul

• Merz: EU to tighten sanctions on Russia if no progress on Ukraine this week

• Charts- 21-day Bollinger bands expand, 5, 10 & 21-day moving averages slip

• Daily momentum studies conflict - a bearish setup remains despite the bounce

• A lose above the 1.1323 21-day moving average would end the downside bias

• Monday's 1.1065 low then 1.1053 0.618% of the Mar/Apr rise are first support

• This week's 1.1242 high, then last week's 1.1380 top are initial resistance

• 1.1175 1.494 BLN and 1.1200 952 mln close strikes for May 14th
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +1.8% from Tue 0.6358 low as USD buying dissipated overnight

• U.S. inflation lower than forecast, CPI 2.3% y/y (Reuters poll 2.4%)

• Mon's 'negative USD trade' exodus usurped by improving risk-sentiment

• AUD breaks back above 0.6456 200-DMA, sights set on 0.6550 resistance

• AU wage data due 0130 GMT Wed, employment Thur (Reuters poll +25.0k jobs)

• Overnight range 0.64015-785, support 0.6355 0.6180, resistance 0.6550 0.6687
AUD Daily 200-DMA


AUD Hourly Bollinger Study

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

Synopsis:

Bank of America sees April’s CPI report as largely benign and consistent with expectations, providing little new justification for a policy pivot by the Federal Reserve. The report suggests tariff-driven inflation is yet to fully surface, and with inflation still above target, rate cuts remain unlikely in the near term unless labor market conditions worsen significantly.

Key Points:

• In-line CPI data: Headline and core CPI both rose 0.2% m/m in April, matching BofA's forecasts. On an unrounded basis, core came in at 0.24%. Y/y headline CPI fell to 2.3%, its lowest since February 2021, while core remained steady at 2.8%.

• Modest core goods inflation: Core goods rose 0.06% m/m. While auto prices declined (-0.18%), items with significant import exposure—such as furnishings, drugs, and IT—saw modest upticks, possibly hinting at early tariff effects.

• Stable core services: Core services rose 0.29% m/m, averaging 0.22% over the last three months. Weakness in airfares and lodging may reflect waning demand for discretionary services.

• PCE impact minimal: BofA expects April core PCE to come in at 0.20% m/m, implying a 2.6% y/y rate. Risks to that estimate come from Thursday’s PPI report, particularly in financial services.

• Fed implications: The report does not shift Fed expectations. BofA maintains that inflation remains too elevated for rate cuts without clear labor market deterioration. Tariff-driven price increases are expected to emerge more clearly in coming months.

Conclusion:

The April CPI report was benign and offered no major surprises. While some signs of tariff effects are emerging, they are not yet material. As a result, the Fed remains in wait-and-see mode, with policy on hold barring significant labor market weakness.

May 13 (Reuters) - The dollar index slid on Tuesday as waning concerns about inflation and optimism about a growth revival following U.S-China trade talks lifted U.S. share prices.

U.S. consumer prices climbed a below-forecast 2.3% in the 12 months through April, the slowest pace in four years. The White House announced it will lower the tariff rate on small packages from China while China said it will lower its tariffs on U.S. goods to 10% for an initial 90 days starting on Wednesday. China also removed a ban on airlines taking delivery of Boeing planes. U.S. President Donald Trump and Saudi Crown Prince Mohammed bin Salman signed a strategic economic partnership agreement, including a $600 billion commitment from Saudi Arabia to invest in the United States. A number of U.S. technology firms announced artificial intelligence deals in the Middle East. Treasury yields firmed as shares rose while a few banks adjusted their Fed forecasts to reflect a more benign economic trajectory. In a social media post, Trump repeated his call for the Federal Reserve to lower interest rates, saying prices for gas, groceries and "practically everything else" are down.

EUR/USD recouped most of Monday's loss as risk tone improved. German investor morale rose more than expected in May. Dutch central bank chief Klaas Knot said the dollar will stay the world's key currency for some time. Despite its bounce, techs remain bearish below a sliding 10-DMA and 1.1200 resistance. The 55-day moving average 1.1030 is within striking distance. GBP/USD firmed toward 1.3302, the 21-day moving average. Cable was boosted earlier by hawkish comments from Bank of England Chief Economist Huw Pill while U.K. data showed Britain's jobs market cooled again last month.

USD/JPY fell below its Ichimoku cloud though the yen remains on its heels against other G10 currencies as risk tone improves and implied volatility sinks.

AUD/JPY rose nearly 1% to it highest level since March.

Treasury yields were up 2 to 6 basis points as the curve steepened. The 2s-10s curve was up about 2 basis points to +46.1bp.

The S&P 500 rose 1.02% fueled by gains in tech and energy shares.

Oil jumped 2.87% on improving demand prospects. Gold rose 0.4% while copper gained 2.12%.

Heading toward the close: EUR/USD +0.88%, USD/JPY -0.62%, GBP/USD +0.96%, AUD/USD +1.68%, DXY -0.78%, EUR/JPY +0.25%, GBP/JPY +0.33%, AUD/JPY +1.03%.(Editing by Burton Frierson Reporting by Robert Fullem)

• USD/JPY holds in narrow 147.65-148.54 EBS range ahead of US CPI

• Trsy yields firm as shares rise after soft CPI, tariff reductions

• Both China and U.S. announced selective reduction in tariff levels

• Pres. Trump secured $600 billion investment commitment from Saudi Arabia

• Oil up 2% as U.S. sanctions companies sending Iranian oil to China

• Yen vols slide across tenors, 3-mo. implied lowest since March

• USD/JPY dips below 147.88-150.40 Ichimoku cloud, tests 21-day upper Bolli

• Yen crosses move broadly higher with AUD/JPY up 1% at a new 2-mo. high

• Resist: 147.88 cloud bottom; 148.65-70 Dec 3 and Mar 31 lows

• Supp: 147.48 21-day Bolli top; 146.60 55-DMA; 146.18 May 8 high

• Tokyo to eye Japan corporate goods prices for April
Yen

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

• NY opened near 1.1105 after 1.1089 traded on EBS in Asia, the rally extended

• US$, US yields fell after April CPI showed slower than expect price increases

• Stocks, gold & other commodities rallied as US$ sank; EUR/USD rallied to 1.11835

• US yields turned higher but EUR/USD remained positive on the session

• USD/CNH drop toward 7.1960 helped EUR/USD trade up +0.81% in NY's afternoon

• Techs lean bearish; pair below 10-DMA & 1.1200 resistance, monthly RSI is falling
eurusd


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

Synopsis:

SocGen advises that major currency pairs like EUR/USD and USD/JPY are likely to consolidate in narrower ranges in the near term, as FX correlations to rate differentials and risk sentiment have weakened. However, they maintain a bearish medium-term USD outlook, encouraging investors to use this pause to hedge against renewed dollar weakness.

Key Points:

• Correlations Breaking Down:

  • USD’s inverse correlation to risk sentiment has weakened or even turned positive.

  • US economic expectations are increasingly detached from hard data, muddying FX signals.

• Short-Term View:

  • EUR/USD and USD/JPY expected to range-trade, pausing after recent volatility.

  • Markets await clarity on whether economic data will align with optimistic expectations.

• Medium-Term Outlook:

  • Further USD weakness is likely later in the year as macro fundamentals reassert themselves.

  • Foreign investment in US assets remains extreme, and gradual outflows are likely to weaken the dollar.

• Tactical Strategy:

  • Use this period of consolidation to hedge against the potential for renewed USD downside.

  • FX markets may enter a calibration phase before resuming trend moves.

Conclusion:

SocGen sees the current phase as a pause in FX markets, especially in EUR/USD and USD/JPY. Investors should not chase moves now but rather prepare for renewed USD weakness, particularly as foreign positioning in US assets begins to normalize.

• $CAD hovers near flat at 1.3975 into Europe close NorAm range 1.4016-1.3974

• Pair reverses early, post-CPI USD rise; Commodities keep rising aids CAD gain

• Oil up 1.84%, copper with a 2% gain, gold up 0.4% despite calmer US econ outlook

• UST yields off early NorAm lows; front-end yields near flat, long-end +3-5bp

• $CAD supt 1.3958 Tuesday low, 1.3900 psychological lvl, 1.3873 rising 10-DMA

• Res 1.4016 Tuesday high, 1.4019 the 200-DMA, 1.4083- 50% of 1.4414-1.3751

CAD Chart:


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

Synopsis:

Morgan Stanley expects flat US retail sales in April, with auto sales declining and restaurant spending rebounding. Industrial production is forecast to rise 0.4% month-over-month, driven by a surge in utility output, while manufacturing shows signs of fatigue.

Key Points:

• Retail Sales:

  • Headline and control group sales: Expected to show no change in April.

  • Auto sales: Forecast to fall by 1.0%M.

  • Restaurant spending: Expected to rebound by 1.0%M.

  • Broader goods categories likely see muted activity.

• Industrial Production:

  • Headline IP: Projected to rise 0.4%M, lifted by increased utility usage.

  • Manufacturing output: Seen falling 0.1%M overall.

  • Non-auto manufacturing: Expected to decline 0.2%M, ending a recovery trend since November.

  • Despite April softness, non-auto factory output is up 1.9%Y, the strongest annual pace since 2022.

Conclusion:

April data may point to cooling momentum in US consumer and manufacturing activity. While utility demand props up overall industrial production, underlying weakness in manufacturing and flat retail sales could raise questions about the strength of Q2 growth.

As tariff-related volatility eases, GBP/USD traders are focusing back to economic data and central banks, with below-forecast monthly U.S. core CPI data on Tuesday giving a slight edge to sterling bulls against a backdrop otherwise characterized by stability in Fed and BoE expectations.

LSEG’s IRPR sees both central banks holding steady in the coming months. STIR futures are pricing a 75% chance of a BoE cut in August and a likely Fed cut in September. By December, markets expect Fed rates at 3.93% and BoE at 3.78%. Sterling rose from a low of 1.3169 in Asia to 1.3247 in early NorAm, gaining momentum during European trading after BoE Chief Economist Huw Pill expressed concern that UK inflation could be more persistent than anticipated, which suggested rates may need to stay high for longer. Pill had opposed last week’s BoE rate cut.

Given the relatively symmetrical paths that markets foresee the BoE and Fed taking, and barring a renewed flare-up in U.S. trade tensions, sterling is likely to remain anchored near current levels, bounded by 1.3079, the 50% Fib of 1.3445-1.2712, and 1.3445, which is the 2025 high put in on April 28.
GBP Chart:


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

Synopsis:

Bank of America has lowered its USD/CAD year-end forecast from 1.40 to 1.38, citing overly optimistic CAD pricing in April. While the pair may consolidate near 1.40 in the near term, BofA sees medium-term downside to 1.35 and recommends a 1-year RKO (reverse knock-out) put to express that view.

Key Points:

• Revised Forecast: USD/CAD is now expected to end 2025 at 1.38 (previously 1.40), with potential to reach 1.35 in the medium term.

• Drivers of CAD Strength: April’s rally was fueled by a BoC rate cut pause, expectations for fiscal expansion, and anticipated investment inflows—factors BofA believes may have driven temporary CAD overvaluation.

• Near-Term Outlook: BofA sees USD/CAD trading sideways around 1.40 over the next two quarters before gradually declining.

• Trade Strategy: A 1-year RKO put is favored to cheaply express a bearish view while taking advantage of current skew pricing.

• Macro Risk: The main risk is a North American recession in 2025, which would trigger renewed USD strength and invalidate the trade.

Conclusion:

BofA remains moderately bearish USD/CAD into 2025, targeting 1.35 medium-term, but sees near-term consolidation. Their preferred expression is a cost-efficient options strategy, allowing participation in a slow USD decline without overexposing to short-term volatility.

• AUD/USD rallied 0.6362-0.64195 overnight, NY opened near 0.6412, was up +0.65%

• Softer US yields & broad based US$ selling underpinned AUD/USD

• Equity drop and gold rally indicated investors avoided US assets

• USD/CNH rally off its 7.1791 low likely helped to prevent further AUD/USD gains

• Daily RSI is rising but pair remains below the 10- & 200-DMAs which may worry longs

• Right shoulder of head & shoulders top forming on daily chart may also worry bulls

• US April CPI is a key data risk in NYH's morning
audusd


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

• Cable nudges up to 1.3219 as BoE's Pill says rates might need to stay high

• 1.3219 is highest level since Monday's four-week low of 1.3140

• Pill wanted BoE to keep rates unchanged last week. Bailey speaks at 1500 GMT

• U.S. CPI data due 1230 GMT: 0.3% MM, 2.4% YY f/c. Core f/c 0.3% MM, 2.8% YY

• GBP/USD might extend north if U.S. CPI data is cooler than expected

• UK police arrest man for arson after fire at PM Starmer's house

GBPUSD

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

• U.S.-China tariff reset has aided EUR/GBP's descent to 0.8400

• The subsequent squeeze in USD shorts has seen EUR, CHF, JPY underperform

• With recent support at 0.8450/75 giving way, this opens the door to 0.8350

• As mentioned previously, upcoming UK-EU summit (May 19) should underpin GBP

• UK PM Starmer's rhetoric is geared towards seeking closer EU ties

• Bias likely to fade rebounds in the cross in lead up to summit

• Resistance = 0.8450/75 (prior support), 0.8490 (200-hour SMA/EMA)
EURGBP hourly chart

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

• EUR/USD is an important psychological swing point

• There's a large amount of option and corporate related hedging tied to 1.10

• Big levels lie ahead 1.10 - 55-DMA 1.1029, 38.2% Jan- April surge is 1.1020

• Low following trade truce was 1.1065 EBS, range next day 1.1089-1.1123

• Any drop below 1.10 would be significant given traders are betting on rise

• Lows ahead 1.10 may encourage more traders to bet on a bigger rally

• Betting dollar drops further is pure speculation

•
EUR/USD

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

Level Technical Significance

1.1378 Daily High May 7

1.1336 Daily High May 8

1.1293 Daily High May 9

1.1242 Daily High May 12

1.1118 ==Update Price==

1.1019 38.2% Fibo 1.0125-1.1572

1.1000 Psychological Level

1.0943 Daily Low Apr 10

1.0880 Daily Low Apr 7

Strategy Sell @ 1.1195

Current Position Flat @ 1.0870

Target: Stop:

Open/Close 03-Apr-25

EUR/USD registered the biggest one-day drop since November 2024, on Monday, highlighting the near-term bearish sentiment. Also note fourteen-day momentum remains negative. The focus is now on the 1.1019 Fibo, a 38.2% retrace of 1.0125 to 1.1572 2025 (EBS) rise, a break and daily close below which would lead to a much deeper drop. We are looking to get short at the 1.1195.

Daily Chart:

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

• Cable holds below 1.3207 (Asia high) after cooler UK ex-bonus pay growth

• Up 5.6% vs 5.7% f/c, boost for doves. 1.3215 is additional resistance level

• 1.3215 was rally high from 1.3140 four-week low Monday (1.3213 = Friday low)

• 1.5 cent drop to 1.3140 prompted by Geneva news: China-U.S. tariffs slashed

• Goldman Sachs now expects Fed to cut rates just once this year, in December

• EU analysing UK-U.S. trade deal. BoE's Pill (hawk) speaks at 0845 GMT

GBPUSD

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