• USD/JPY consolidating, spot pinned to 200-hour MA cluster around 162

• Lack of follow-through above 162.84 cycle high keeps topside momentum in check

• Downside still limited for now, 160.70 remains the key near-term pivot

• GPIF headlines a slow burn but incrementally JPY/JGB supportive - no allocation shift, focus within bands

• Geopolitics keeping oil firm as Iran tensions escalate, which is helping keep USD/JPY bid

• Overall conviction light into Tuesday’s US CPI

• Hot CPI seen reopening 162.84, break would target 163.50 next
USDJPY hourly chart


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

• AUD/USD fell to 0.6924 in Asia, as safe-haven USD rose on renewed Iran attacks

• 0.6924 is the lowest level since July 8 (0.6907 was the low that day)

• Friday's high was 0.6969 (in Asia). 0.6965 was NY session high Friday

• CFTC data: net AUD short rose to 24,651 contracts in week to July 7

• Third consecutive week in which the net AUD short position grew

• Net AUD position flipped to short in June (net long hit 13-year high in May)

AUDUSD


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

• Cable holds sub-1.34 after safe-haven USD rises on renewed Middle East attacks

• 1.3368-1.3392 is Monday range-to-date. 1.3368 is the lowest level since July 8

• July 8 low was 1.3323, after dollar jumped on Iran guidance from Trump

• Friday range was 1.3392-1.3452 (1.3452 is the highest level since mid-June)

• CFTC data: net GBP short fell 14% to 87,903 contracts in week to July 7

• Net GBP short position hit nine-year high of 105,719 contracts in June

GBPUSD


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

• EUR/USD lower in response to latest Mid-East escalation and Iran closure of straight of Hormuz, higher oil price

• FX option implied volatility higher in response - 1-month 5.5 from 5.15 Friday (recent/2026 low 4.9)

• Tuesday's US CPI data adds a further layer of FX volatility risk. However, vol gains proving limited so limited

• EUR put over call vol premium via risk reversals reflects greater risk of EUR losses vs gains, but steady since last week

• EUR still in grip of huge 1.1400 strike expiries - another 1.1bln euros Mon, 2.6bln Tues and more Wed-Thurs

• EUR/USD danger zone remains at post 17 June Fed and 1-year lows at 1.1325 and 1.1300 option barriers
EUR/USD FX option strikes expiring July 13-17


EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


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

• AUD/USD down 0.35% in Asia as risk aversion reigns on U.S.- Iran escalation

• Opened at 0.6942 after closing at 0.6951 Fri, low of 0.6924 seen Monday

• U.S. crude up 4%, S&P 500 futures -0.45%, U.S. 2-year yield hits 16-mth high

• AUD/NZD -0.3% stays offered as RBA/RBNZ rate expectations re-priced

• AUD/JPY -0.1%; Japan to push GPIF to boost alternative investments

• US June inflation data, Fed Chair Warsh's Congress testimony key this week

• Resistance 0.6965-70, clear break opens 0.7000

• Support 0.6910-20, pivotal at 0.6878 200-day MA, daily close below bearish
AUD:

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

• USD/JPY looks to have found a new equilibrium around 162.00

• Asia so far today 161.67-162.17 EBS, GPIF news yen supportive

• That said, re-flaring of US-Iran hostilities USD supportive

• Technically, USD/JPY holding above daily Ichimoku kijun at 161.17

• Spot also back above 161.87-99 hourly Ichimoku cloud

• 200 and 100-HMAs in area at 162.01 and 162.12, respectively

• $2.4 161.00-75, $2.2 bln 162.00-30 option expiries today to contain spot?

• EUR/JPY heavy, 184.60-72 EBS, mostly in 184.61-99 daily Ichimoku cloud

• Essentially sideways since May 7 in 183.18 (June 24)-186.31 (June 16) range

• GBP/JPY 216.22-84, off more after rally to 218.00 Thursday

• Thursday high best for cross since 222.73 in January 2008

• Good support seen for now in area of ascending 200-HMA at 216.35

• CHF/JPY heavy, 199.54-200.20, support below at 198.53 ascending 200-DMA

• AUD/JPY sideways after rally to 112.80 July 6, Asia today 112.09-52

• Support from area of 200-HMA at 112.23

• NZD/JPY better bid, to 93.46 before easing back, low 92.99

• Follows rally to 93.57 Friday, still mostly in 93.03-85 daily Ichi cloud

• 100-DMA at 92.97 support for now, at top of 92.91-93.32 hourly cloud

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


USD/JPY nearby option expiries this week:

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

• EUR/USD trading heavy in Asia on renewed US-Iran hostilities, crude oil rise

• Range so far 1.1385-1.1410 EBS, off after mini-rally to 1.1460 Friday

• Resistance seen good ahead of daily Ichimoku kijun at 1.1473

• Heavy also above hourly Ichimoku tenkan at 1.1401

• On option expiries today, total E1.4 bln on 1.13, supportive

• More above however, E3.7 bln on 1.14, E4.6 bln between 1.1500-60, to cap?

• EUR/JPY also heavy, 184.60-72 EBS, mostly in 184.61-99 daily Ichimoku cloud

• Essentially sideways since May 7 in 183.18 (June 24)-186.31 (June 16) range

• EUR/GBP 0.8517-19 following fall to 0.8509 Friday, matched low June 27, 2025

• EUR/CHF outlier, buoyant, near recent highs and 0.9228-32 EBS in Asia

• 0.9237 high July 8, 0.9226 peak on June 22

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


EUR/USD nearby option expiries this week:

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

• Australian gold miners fall as much as 2.4%, while the broader benchmark was down 0.5% as of 0210 GMT

• Bullion prices slid more than 1% in early Asian trade, as fears of the Strait of Hormuz closure drove oil prices sharply higher and revived expectations of elevated interest rates to combat inflationary pressures [GOL/]

• Shares of gold miners Northern Star Resources were down 2.6%, while St Barbara and Evolution Mining

lost 2.7% and 1.7%, respectively

• Sub-index has fallen 18.8% YTD

(Reporting by Roshan Thomas in Bengaluru)

• Re-flaring of Middle East tensions a reason to remain long USD

• Japan MOF new tack, pressure on GPIF to buy Japan JPY supportive

• Seems USD/JPY back to stasis on these two opposing influences

• Equilibrium of sorts below YTD high of 162.84 on July 1

• 162.84 also 40-year high, highest since 163.36 in December 1986

• USD/JPY 161.67-162.07 EBS so far in Asia today

• New equilibrium around 162.00? Range Friday 161.28-162.43, inside day?

• Daily chart shows USD/JPY mostly above 161.66 Ichi tenkan, kijun 161.17

• Hourly chart interesting with cloud now descending, currently 162.07-17

• Spot to break back into cloud? Trade back above? Or stay capped ahead?

• Now descending 200-HMA 162.02, also descending 100-HMA 162.12 above

• In option expiries today, total $2.2 bln above between 162.00-30, to cap?

• Below total $2.4 bln between 161.00-75, to help limit downside?

• Some decline in IMM CTA JPY shorts but positions still large

• Interesting twist in JGB-US rate diffs, narrower in shorts, longs widen

• Interest rate differential in 2s to @272 bps while in 10s to @176 bps

• Related comments , , ,

• And , also , on Japan's GPIF

• US markets , , ,

• Crude oil at Asia start , on US-Iran

• On Fed , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:


JGB-US Treasury 2-year interest rate differential:

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

• AUD/USD down 0.25% as risk aversion grips Asia on Middle East tensions rise

• Iran attacks Gulf states after US strikes, says Strait of Hormuz closed

• U.S. crude +3%, S&P 500 futures -0.3%, 10-yr Treasury futures down 5 ticks

• AUD/JPY eyed; Japan to push GPIF to boost alternative investments

• US June inflation data, Fed Chair Warsh's Congress testimony eyed this week

• Failure to break resistance keeps AUD in 0.6900-0.6970 range

• More resistance at 0.7000; support 0.6910-20, pivotal at 0.6878 200-day MA
AUD:

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

• AUD/USD opens at 0.6942 after closing 0.1% higher at 0.6951 on Friday

• Early Asia range 0.6942-0.6951; Friday global range 0.6934-0.6969

• Trades with a slightly offered tone as Middle East tensions escalate

• Iran attacks Gulf states after US strikes, says Strait of Hormuz closed

• US conducts strikes on Iran missile systems around Hormuz, Axios reports

• US June inflation data, Fed Chair Warsh's Congress testimony eyed this week

• AUD/JPY key; Nikkei says Japan to push GPIF to boost alternative investments

• Resistance 0.6965-70, clear break opens 0.7000

• Support 0.6910-20, pivotal at 0.6878 200-day MA, daily close below bearish
AUD:

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

• USD G10 net spec long +$0.89bn in the June 1-7 reporting period; $IDX -0.1%

• EUR$ -0.08% in period; specs -17.3k contracts now -16.2k; low growth EZ stirs selling

• $JPY -0.3%; specs +31.3k contracts now -123.8k; intervention woes weigh, pair still abv 160

• GBP$ +0.72%; specs +14.2k contracts now -88k; stable politics, steady BoE view lifts GBP

• $CAD +0.03%; specs -22.3k contracts now -173.1k; pair capped abv 1.42, lower in new period

• AUD$ +0.2%; specs -7k contracts now -24.7k; RBA less hawkish relative to Fed in 2026

• For now, most c.banks await data to see how recent oil volatility affects inflation/growth

• U.S. CPI on July in focus; Fed policy view more dovish post-payrolls last week

Majors w/IMM performance Chart:


IMM Position Table:


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

• NY opened near 0.6945 after AUD/USD traded 0.6934-0.6969 overnight

• The pair traded in choppy fashion early but bulls eventually took control

• Broad-based USD selling, USD/CNH drop to 6.7766 helped to lift AUD/USD

• Copper gains & erosion of some losses in gold, silver contributed to the lift

• AUD/UD hit 0.6965, neared 0.6955 late and traded up +0.20% late in the day

• Rising daily, monthly RSIs & pair's hold above the 10-DMA give bulls comfort
audusd


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

MUFG Research sees a scope for EUR to gain some grounds over the coming weeks.

"The euro is currently the worst performing G10 currency in July but the 2-year yield spread has started to turn in favour of some moderate EUR/USD recovery. That reflected a sharper jump in yields in Europe relative to the US," MUFG notes

"The ECB minutes should at least reinforce the current pricing of another rate hike in Europe while for the US next week’s CPI release and Fed Chair Warsh’s semi-annual testimony will be crucial for short-term yields

We continue to see risks of US yields turning lower that should reinforce renewed upward momentum for EUR/USD," MUFG adds.

The yen has gained some government support, though markets remain skeptical.

Finance Minister Satsuki Katayama said the government was exploring measures to encourage GPIF and other pension funds to increase investment in domestic assets, helping lift the yen and pull 10-year JGB yields back from nearly 30-year highs near the technically significant 2.83% level. Katayama's remarks add to a series of government efforts to calm JGB markets, including Chief Cabinet Secretary Minoru Kihara saying Thursday that authorities were closely monitoring developments and remained committed to steadily lowering Japan's debt-to-GDP ratio.

Absent concrete policy details, investors are largely viewing the remarks as an attempt to talk down JGB yields and bolster the yen.

However, a shift in pension fund allocations toward domestic assets could help reverse some of the capital outflows that have weighed on the yen since the start of Abenomics. The currency's decline from around 80 per dollar in 2012 has coincided with pension funds lifting overseas allocations to about 50% from just over 20%. For yen bulls, Katayama's emphasis on BOJ independence, reports the BOJ may upgrade its growth outlook and signs of persistent inflation strengthen the case for further rate hikes, supporting the currency. A stronger-than-expected annual rise of 7.1% in Japan's corporate goods prices in June further bolsters the case.

While the yen's rebound has revived favorable July seasonals, the main challenge for bulls is higher-for-longer U.S. rates and low FX volatility continuing to support short-yen positions. Next week's U.S. CPI could reinforce that outlook.

The 162.84 YTD high looks less threatened, but USD/JPY needs a close below the 21-day moving average near 161.60 and then the 160.00 psychological level to signal a more durable turn in favor of the yen. Intervention that forces out excessive speculative short-yen positions would further strengthen that case.
JGBs


Yen


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

Bank of America Global Research provides the latest investors feedback on JPY intervention.

"For the first time in years, we didn't meet a single yen bull during our mid-year investor meetings last week, consistent with speculative yen shorts close to 20-year highs. Investors do not expect intervention to be effective in keeping USDJPY below 160," BofA notes.

"Pushback on our cautiously optimistic view on JPY, premised on more balanced flows, focused on Japan's reflationist policy, including the government's vocal stance on monetary policy. Investors do not think we are yet at pain thresholds in USDJPY and JGBs that would lead to a more prudent policy mix," BofA adds.

EUR/USD staged a rally that pushed the pair above its 21-day moving average to a five-session high, but the advance faltered as buyers failed to sustain the upward momentum. This loss of steam has generated technical warning signs pointing to potential downside risk, particularly with key U.S. inflation data due next week.

Adding to the bearish tone, fresh technical signals appeared on the daily chart, including a bearish RSI divergence at today's peak and the formation of an inverted hammer candlestick pattern. These new signals reinforce pre-existing bearish indicators, namely the rising channel pattern on daily charts and a monthly chart structure suggesting the pair is merely consolidating its decline from June's monthly high rather than reversing it. Meanwhile, Bollinger Bands on the monthly timeframe have narrowed over a 15-month period, hinting the pair could stay rangebound—though this could change quickly if U.S. CPI data injects fresh volatility.

Market expectations point to June core CPI ticking up to +0.3% month-on-month from +0.2%, with the year-on-year rate holding steady at 2.9%. A stronger-than-expected reading would likely boost the dollar, yields , and rates on expectations of a more hawkish Fed, potentially driving EUR/USD below the rising channel's base and June's low, triggering stop-losses and pushing the pair toward support near 1.1050-1.1100. Conversely, a softer CPI print could weaken the dollar and rates, lifting EUR/USD and possibly invalidating the bearish technical setup.
eurusd


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

ANZ Research previews next week's US June CPI report and the USD outlook around the release.

"Next week’s June CPI release is the key data point ahead of the July FOMC meeting and will determine whether markets build additional Fed tightening expectations or extend the recent consolidation. Markets are likely to look through any energy-driven boost to headline inflation if underlying price pressures remain contained," ANZ notes.

"Scenario 1: CPI in line with or below expectations (base case) Lower energy prices and easing geopolitical risks have reduced near-term inflation pressures. As such, a CPI print in line with or below expectations is unlikely to meaningfully shift Fed pricing. Also, we expect June’s core CPI to have risen by 0.2% m/m, leaving annual core inflation at 2.8% y/y. While inflation data may remain volatile in coming months, an in-line June outcome should be largely a non-event for the USD and keep the DXY broadly confined to its recent 100.5–101.5 range.

Scenario 2: CPI above expectations A stronger-than-expected core CPI print would reinforce concerns that inflation remains sticky and prompt markets to bring forward or increase Fed tightening expectations. This would support the USD. This can take the DXY towards touching 102, particularly if followed by a firm PPI print, increasing confidence in a more hawkish Fed path. CFTC non-commercial positioning show that net longs have increased. EUR longs continue to decline, while most other G10 currencies remain net short, underscoring the market's preference for the USD," ANZ adds.

Goldman Sachs sees a scope for FX carry strategy to outperform over the coming months 

"We argue that carry bears more relevance for G10 FX markets now than it has at virtually any other point since the year 2000, and we continue to see value in carry strategies funded by G10 low-yielders (JPY, CHF, EUR, CAD) in the months ahead," GS notes.

"G10 FX currently boasts the combination of historically elevated levels of outright carry, and historically subdued levels of vol. A stabilisation in G10 policy rates at high and varied levels following the post-Covid inflation surge and recent energy shock has helped allow for this dynamic, but in practical terms for FX markets, it has produced exceptionally high levels of carry-to-vol currently, including near multi-decade highs for the likes of EUR/CHF and USD/CAD.  

We view the opportunity to earn carry in G10 FX while remaining relatively insulated from (or even hedged against) drawdowns in risk as a useful option in multi- asset portfolios in the current backdrop," GS adds.

• EUR/USD rallied above the 21-DMA overnight, hit a 5-session high of 1.1461

• General selling of USD and USD/CNH's drop helped prop up EUR/USD

• The pair then began giving back some of the overnight gains as USD firmed up

• US yield gains & drops in gold, silver contributed to the USD recovering

• EUR/USD fell below the 21-DMA, sat near 1.1435 in early NY, was up only +0.03%

• A daily inverted hammer candle formed which could be a concern for bulls

• EUR/USD trading in a rising channel on daily charts may also be worry bulls
eurusd


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

• AUD/USD rallied sharply overnight, hit a 13-session high of 0.6969

• Broad-based USD selling & USD/CNH drop below 6.7770 buoyed AUD/USD

• Sellers emerged however as USD, US yields firmed up

• Drops in gold and silver helped the USD recover some losses

• AUD/USD pulled back, slid back below the 21-DMA, neared 0.6950 into NY's open

• The pair was up only +0.10% after turning away from 0.6980/0.7010 resistance

• Rising RSIs, AUD/USD's hold above the 10- & 200-DMAs give bulls some comfort

• A daily inverted hammer candle formed which may be a concern for bulls
audusd


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

July 10 (Reuters) - EUR/USD risk reversals are FX option structures that benefit from volatility in one direction over the other, and in the right environment they can generate steady premium. Just as importantly, shifts in their pricing offer the FX market valuable clues about directional risk sentiment.

FX options are forward-looking instruments that thrive on volatility. Because actual volatility is unknown — yet central to an option’s premium — dealers use implied volatility as a proxy. Risk reversals typically show an implied-volatility premium in the direction where dealers expect volatility to rise, and a discount in the other.

Trading a risk reversal involves owning a strike in one direction and selling a strike in the opposite direction. Buyers of risk reversals want spot to move in that direction, lifting implied volatility and boosting the option’s value. At the same time, the strike they’ve sold should lose value, allowing the entire position to be closed for a profit.

Changes in those directional premiums can reveal shifts in how the market perceives the path of a currency pair — or signal rising risk of a directional break. We saw this in EUR/USD amid fears of a re-escalation in the Middle East conflict this week, with the benchmark 1-month expiry 25 delta risk reversals widening their EUR put over call risk premium (downside over upside strikes) to 0.45 from 0.35. This rise in premium — and the sentiment signal it carried — proved justified, as EUR/USD implied volatility increased from 4.9 to 5.3 as EUR/USD slipped below 1.1400 earlier this week. What's interesting is that despite EUR/USD moving back to the low-mid 1.14's, the 1-month risk reversal has retained that firmer downside strike premium, which suggests the options market remains alert to the risk of more EUR/USD weakness and implied volatility gains.
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility


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

The JPY snapped back from four-decade lows on Thursday after Finance Minister Satsuki Katayama said Tokyo wants pension funds—including the Government Pension Investment Fund, the world's largest with ¥293.4 trillion ($1.81 trillion) in assets as of December—to boost allocations to domestic assets "substantially." Given GPIF's outsized influence on institutional asset allocation trends, the comments were read as a signal of official discomfort with yen weakness, and USD/JPY firmed over 0.5% to 161.45, easing some of the JGB yield pressure that had built up on fears the Takaichi administration's fiscal expansion could compromise BOJ independence.

The options market moved quickly to reprice risk. Short-dated implied volatility spiked initially—1-week into the mid-6s and 1-month from 6.6 to 7.0—before sellers stepped back in as spot stabilized, a classic pattern of event-driven vol buying followed by profit-taking once the immediate move plays out.

The more telling shift was directional. Demand resurfaced for sub-160.00 strike JPY calls, and the 1-month 25-delta risk reversal—already elevated to reflect the intervention risk that has haunted the market since late April—richened further from 1.4 to 1.5 in favour of JPY calls over puts. That skew reflects a market still pricing meaningful tail risk of a sharper JPY rebound, whether driven by verbal intervention, actual MOF/BOJ action, or a genuine reallocation wave from institutions like GPIF.

Yet the trade in butterfly spreads told a more nuanced story. The drop in wing premium—1-week 10-delta butterflies down to 2.25 and 1-month to 1.45, both well off recent multi-year highs—suggests dealers are pricing less tail risk of an explosive, disorderly breakout in either direction. In other words, the market believes Katayama's jawboning has capped near-term upside risk in USD/JPY without necessarily triggering a violent reversal.

Net effect: JPY has found a firmer floor, vol curves have flattened somewhat at the wings, but the persistent bid for JPY calls confirms traders remain focused on the ever-present intervention risk—just less convinced the next leg lower in USD/JPY would be disorderly.
USD/JPY 25 delta risk reversals


USD/JPY 10 delta butterfly spreads


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

• Cable rose to 1.3452 in Asia as dollar fell vs yen on Japanese pension fund news

• 1.3452 is the highest level since June 15 (1.3460 was the high that day)

• Thursday high was 1.3430, after more short-covering (CFTC data due at 1930 GMT)

• 1.3140 was seven-month low on June 24. Pullback low from 1.3430 was 1.3381

• Apollo Global trumps U.S. investor Castlelake with £5.7 billion easyJet bid

• Burnham set to replace Starmer as Britain's prime minister on July 20

GBPUSD


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