• EUR/USD resilient despite fresh highs in oil and the Bund-OAT spread

• This reinforces the view that bearish EUR trades are better expressed on the crosses (CHF, JPY)

• Dollar struggling on a softer tone in AI/tech names. Positioning has also been a problem

• Plenty of competing narratives - geopolitics, AI, French stress - keeping USD conviction low

• EUR/CHF is cleanly through the 200-day MA (0.9238). A closing below will embolden sellers

• Initial support is at 0.9215, which has been tested. Further cushion sits at 0.9180

• SNB minutes signalled less need to intervene in FX. That paves way for deeper pullback in EUR/CHF

• Bund-OAT spread remains the real-time indicator for the cross

• At fresh highs, this will keep EUR/CHF on the backfoot
EURCHF daily

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

• Cryptocurrency and blockchain-related firms slide in premarket trading

• Bitcoin , the world's biggest cryptocurrency, slides 3.15% to $81,974.01 after climbing for three straight sessions

• Ether down 3.33% at $2,408.48

• Crypto exchange Coinbase Global declines 3.8%

• Crypto miners: Riot Platforms Inc , MARA Holdings , Hut 8 and Bit Digital down 3% to 5%

• BTC buyer Strategy slides 5.4%, among the biggest decliners

• BTC mining machine maker Canaan Inc down 3.4%

• ProShares Bitcoin Strategy ETF loses 3.2%

• iShares Bitcoin Trust ETF down 3.1%

• Bitcoin remains down over 6% YTD, while ether has fallen roughly 19.2%

(Reporting by Jayasree Prabhu)

• French 10-year bond yield rises to 5.09%

• French yield above US 10-yr for first time since 2013

• Brent crude oil climbs above $112 per barrel

• EUR/USD remarkably stable 1.1227-1.1255 on Oct 22

• Oct 14 low 1.1113 when French bonds less stressed, oil lower

• Roles of Japan's dual purpose currency are changing and that's worrying

• EUR/USD traders may act differently under truly risk averse conditions

•
EURUSD French bonds and oil

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

• USD/JPY's slide from 158.00 met strong demand after basing at 156.83 on Thursday - possibly option related

• A massive $2.8 billion 156.90-157.00 FX option strikes expire at the 10-am New York cut (14GMT) Thursday

• Related hedging flows are likely to be limiting deeper declines ahead of the expiry time, more 157s expire Friday

• Implied volatility surged as USD/JPY fell - 1-month from 7.15 to 7.65, but has been trading 7.6-7.55 as spot settles

• Risk reversals increase JPY call over put premiums - 2-week paid 2.2 and 1-month regains 2.0 from 1.9 JPY calls

• Dealers also report a pick up in downside strike demand, so traders more wary of any deeper FX declines

• Related comment - October Fed flashes on FX options radar
JPY option expiry strikes

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

• Limited and familiar USD/JPY ranges around 158.00 pressed FX option implied vols lower this week

• Range-bound spot favoured option sellers with actual/realised volatility being well below implied levels

• However, risk reversals held a firm downside strikes premium - recognising the most vulnerable side of the market

• Thursday's spot drop to mid Oct lows toward 157.00 appears to have caused some panic demand for options

• Benchmark 1-month expiry implied volatility paid 7.65 from 7.15, with some sub 157.00 strikes paid, too

• Huge FX option strike expiries surround USD/JPY in low 157's - related hedging flows may limit deeper spot decline
USD/JPY FXO implied volatility

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

• USD/JPY continuing lower in late Asia trading, from 158.33 in New York

• Asia from 158.25 early to 157.33 EBS, through 157.46/55 lows Oct 5/15

• Towards 157.00 and 156.96 low on October 2

• Seems total $9.1 bln in option expiries today on 157 having little impact

• Another $3.1 bln below between 156.70-97 strikes

• Dealers unsure what's behind today's Asia PM move down, exporters?

• Some cite flows, perhaps from Japanese investors, others say long-paring

• Option gamma plays also cited with spot now below mega-expiries today

• Whatever the case, USD/JPY moving deeper into 155.64-158.44 daily Ichi cloud

• Related comments , , , also
USD/JPY:

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

(Corrects typo USD/JPY 156.90-157.00 )

• FX option strikes expire at 10am New York/14:00 GMT on Thursday October 22

• EUR/USD: 1.1195-1.1200 (2.8BLN), 1.1210-20 (1BLN), 1.1235-40 (1BLN), 1.1250-60 (1.6BLN)

• 1.1270-80 (1BLN), 1.1300-05 (6.1BLN)

• GBP/USD: 1.3380-85 (370M), 1.3475 (200M). EUR/GBP: 0.8450-60 (348M)

• AUD/USD: 0.7000-05 (1BLN), 0.7010-15 (1.2BLN), 0.7020-30 (550M), 0.7035-40 (460M), 0.7050 (247M)

• NZD/USD: 0.5700-05 (616M). EUR/JPY: 178.50 (460M).

AUD/JPY: 109.25 (200M)

• USD/JPY: 156.90-157.00 (2.8BLN), 157.05-15 (627M), 157.25-35 (2BLN), 157.50 (1.7BLN), 157.55-60 (844M)

• 157.70-80 (1.6BLN), 157.90-158.00 (1.9BLN), 158.05-15 (2BLN)

• FX options wrap - Euro hedgers widen the net (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Shares of Australia's Austral Resources rise as much as 5.1% to A$0.062, marking their biggest intraday pct gain since October 6

• The copper cathode producer says drilling at its Cameron River project in Queensland returned high-grade copper-gold intersections across multiple prospects

• Company says reconnaissance drilling confirmed copper-gold mineralisation across six prospects, most of which remain open at depth and along strike

• Adds that 25 of 32 drill holes returned significant copper intersections, supporting further exploration at the project

• Stock up 7%, YTD, including session's moves

(Reporting by Subhalakshmi Dey in Bengaluru)

• AUD/USD -0.2% Thur as buyers step back despite firming RBA hike bets

• Pair pushing lower hourly Bollinger band, downside momentum likely muted

• Futures pricing now implies 65.1% chance of Nov RBA hike, up from 29% Tue

• Move fuelled by RBA Hauser comments that inflation looks materially worse

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• Brent crude +1.2% as U.S. diplomats ordered to leave Saudi Arabia

• Nasdaq finished +1.1% Wed on SpaceX & Super Micro earnings uplift

• Range Asia 0.7013-36 support 0.6865 0.6834, resistance 0.7140 0.7282
AUD Hourly Bollinger Study


AUD Daily 21/55/100-DMA

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

• USD/JPY in stasis, continues to trade sideways, Asia so far 158.12-22 EBS

• Still holding below 158.56 200-DMA, at top of 155.64-158.44 daily Ichi cloud

• Pivoting around 158.13-15 wafter thin hourly Ichimoku cloud

• Massive nearby option expiries today to help contain spot action

• 156.70-97 $3.1 bln, on 157 $9.1 bln, 158.00-15 $3.4 bln 158.25-50 $3.7 bln

• At 158.75 $1.2 bln and between 159.00-40 total $3.3 bln, gamma all over

• JGB-US Treasury rate differentials on wide side, in 2s @289, 10s @223 bps

• Good demand for long-dated JGBs this week, especially after good auctions

• Japanese exporter offers still up top, Japanese importer bids below

• Related comments , , ,

• Also

• US markets , , ,
USD/JPY:

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

• Shares of Vault Minerals fall as much as 3.1% to A$5.600, their lowest since August 7

• Gold producer reports quarterly gold production of 76,849 ounces, down from 92,087 ounces in the previous quarter

• YTD, stock up 3.5%

(Reporting by Tejas Harish in Bengaluru)

• NZD/USD -0.2% Thur as NZ inflation slows more than expected in Sep quarter

• NZ Q3 CPI +0.7% q/q (poll +0.8%), +3.7% y/y (poll +3.8%)

• Futures pricing still implies probability of Oct 28 RBNZ hike above 90%

• NZD remains clear of 0.5634 21-DMA, extension towards 0.5775 zone likely

• Nasdaq +1.1% after SpaceX and Super Micro results stoked earning optimism

• Range NZ 0.5690-0.5703, support 0.5566 0.5485, resistance 0.5995 0.6012
DXY Daily 55/100/200-DMA


NZD Hourly Bollinger Study

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

Danske Research on its EUR/GBP outlook.

"EUR/GBP has rebounded slightly higher to 0.86 after trading close to 0.8450 over the summer. Political instability has once again faded and with a more pragmatic pick for UK chancellor, fiscal sustainability worries have taken a backseat. However, we are attentive to budget risks ahead of the Autumn Statement. The UK economy has also performed better than expected although the past weeks data releases have been to the weaker side," Danske notes.

"We highlight that the UK economy remains fragile and that we see scope for the significant repricing of the BoE to revert to a larger extent than for the ECB, opening for a move higher in EUR/GBP. We continue to forecast EUR/GBP to move higher from current levels but now see the outlook more balanced," Danske adds.

• AUD/USD +0.3% from Wed 0.70045 low in wake of hawkish RBA comments

• AUD probes 0.7034 100-DMA, likely to extend run toward 0.7075 55-DMA

• Futures pricing now implies 55.5% probability of 25 bps hike on Nov 3

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• U.S. tech stocks lifted by earning positivity from SpaceX and Super Micro

• Overnight range 0.7018-36 support 0.6865 0.6834, resistance 0.7140 0.7282
AUD Daily 21/55/100-DMA


DXY Daily 55/100/200-DMA

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

• GBP$ regained vigor in NY afternoon trade, +0.15% at 1.3399; NorAm range 1.3403-1.3381

• Despite slight gain pair anchored by 4-wk highs just above 1.34, capped by 50-DMA at 1.3409

• Today's above f/c UK CPI/PP data affirms expected 25bp rate hike by BoE in early Nov

• LSEG's IRPR indicating BoE rate hikes higher and faster than Fed boosting GBP

• UK Autumn Budget Nov 28 risks stalling bullish trend, though fiscal rules likely to be followed

• GBP$ res 1.3409 Tuesday high, 1.3433 flat 200-DMA, 1.3470 area upcoming cloud twist

• Supt 1.3381 Wednesday NorAm low, 1.3315 daily base line, 1.3268 Oct 16 low

GBP EOD Chart:

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

• NY opened near 1.1235 after 1.1214 traded overnight, 1.1238 traded early NY

• Sellers emerged and 1.1215 traded as USD, US yields

moved up

• EUR/UDS bears couldn't maintain momentum as USD buying faded away

• Yields softened while oil & USD/CNH traded lower on the session

• Rallies in gold and equities contributed to the USD selling theme

• EUR/USD sat near 1.1235 late, was close to flat in NY's afternoon

• Daily long legged doji, monthly bull hammer candle are concerns for bears

• EUR/USD's hold above the 10-DMA also contributes to those concerns
eurusd

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

Bank of America Global Research previews next week's UK Autumn budget due on Oct-28.

"With France the epicentre of market focus, it may be easy to forget that we are a little over 1 week away from the first John Healey Budget. The sense of anticipation (and perhaps apprehension) that has greeted recent Budgets is so far lacking and GBP seems agnostic to upcoming developments at least in the spot FX space. GBP/USD 1mth volatility is trading higher but this reflects the broader step adjustment in G10 FX vol vs USD as France dominates. Our options desk, however, notes that whilst front end vol remains well behaved, daily vol for GBP/USD is 13vol versus an average of 7.5vols. Whilst Budget Day appears well owned, GBP risk premium is close to the lows of the year," BofA notes.

"All in all, our economists think that the Government will deliver a cautious Budget and adhere to the Fiscal Rules. Tougher decisions await but this is for 2027 and not the here and now," BofA adds.

• USD/CAD finding support at the 100-day MA (1.4043), with two attempts to break failing so far

• Initial resistance at 1.4077 is capping and keeping rebounds shallow for now

• On balance, sellers remain broadly in control. Further hurdles sit at the 100-hour MA cluster (1.4110)

• A break below1.4043 exposes the 50% fib of the Sep-Oct rise at 1.4030, then the Fed Sep pivot point at 1.3940

• The BoC is near fully priced to hike next week, after hawkish Macklem comments

• However, recent data (CPI + jobs) has come in softer than expected, which could see some caution creep in for CAD
USDCAD hourly chart


USDCAD daily chart

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

Goldman Sachs changes its RBA rate call.

"In a fireside chat at Citi's ANZ Investment Conference this morning, RBA Deputy Governor Andrew Hauser delivered remarks we view as clearly hawkish. We now expect the RBA to hike by 25bp to 4.85% at its November meeting (previously on hold at 4.60%)," GS notes.

"Last week, we viewed then pricing in financial markets as significantly underestimating the risk of a November rate hike (15% probability vs. GS: 35% probability). Today’s remarks suggest the RBA continues to see risks to inflation and inflation expectations as tilted to the upside even with the delivered 100bp tightening year-to-date and in our view - absent a downside surprise in the 3Q2026 CPI report (due 28 Oct) - make a further hike in November more likely than not. Beyond this, our base case is that the RBA holds the policy rate at 4.85% until a gradual easing cycle begins in 2H2027," GS adds.

Sterling remains anchored by four-week highs near 1.34, buoyed by Wednesday's stronger-than-expected UK CPI and PPI data, alongside other recent upbeat economic indicators, reinforcing expectations for a Bank of England rate hike at the upcoming November 5 Monetary Policy Committee meeting.

The inflation figures, which exceeded the BoE's target, have significantly increased market expectations for rate increases. LSEG's IRPR now suggests a near 100% probability of a 25 basis point hike in November, with a total of 114 basis points of hikes anticipated by December 2027. These BoE expectations outpace those for the Fed, which is largely expected to hold rates steady on October 28, with only 78 basis points of hikes priced in by December 2027.

Recent IMM positioning data showed a substantial short bias in GBP, with specs short approximately 107,000 contracts, valued around $8.9 billion. Given sterling's recent rally, this short position has likely been pared. My IMM metric previously indicated specs were short nearly 55% of all positioning, signaling a strong buy, a condition that has likely lessened given sterling's nearly 1% rise in the recently closed IMM period.

Headwinds remain. Next week's UK Autumn Budget must balance taming inflation against stimulating growth—no easy feat. The Oct 28 Fed decision looms too, with Chair Kevin Warsh's no-guidance practice lifting market volatility as futures eye a less-hawkish path.

For now, with the BoE's hawkish outlook and ongoing USD unwinding, bullish momentum for GBP/USD appears strong, targeting resistance at the upcoming daily cloud twist in the 1.3470s and possibly the September 9 high at 1.3566. Bears will need to breach the rising 10-day moving average at 1.3281 to regain control.
GBP Chart:

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

Credit Agricole CIB Research on the scope for revising its GBP forecasts (currently at 1.31 for GBP/USD and 0.86 for EUR/GBP by year-end).

"The GBP’s resilience vs the USD and its outperformance vs the EUR so far this year has surprised us and reflects the positive impact of several key drivers that, if sustained, could pose risks to our current GBP/USD and EUR/GBP forecasts.

The UK economy has proven to be more resilient so far in 2026 than forecasted by us and the market....UK markets expect four rate hikes in the coming months, making the BoE one of the most hawkish central banks and the GBP one of the most attractive high-yielders in G10...France’s fiscal problems continue to contrast with the ‘prudence’ of the Burnham government and boost the appeal of the GBP as a safe- haven EUR-proxy," CACIB notes.

"We continue to assess the impact of the above drivers on our FX outlook. We would delay any decision on the GBP forecasts, however, until after next week’s Autumn statement and the BoE policy meeting the week after," CACIB adds.

• EUR/USD -0.1%, USD/JPY -0.06%, GBP/USD 0.09%, AUD/USD 0.38%

• S&P E-minis 0.14%, DAX 0.51%, Nikkei 225 0.85%, FTSE 0.01%

• EUR/USD calm masks mounting stress as French yield hits 5%

• USD/JPY dips on BOJ deputy, but cloud and October underpins

• GBP/USD 1.34 provides resistance; BoE expectations in focus

• AUD/USD scales three-week peak on RBA's hawkish Hauser

• ​Option expiries . U.S. Open ​

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

• EUR/GBP falls to 0.8373, its lowest level since May 2025

• Pound benefits from hawkish BoE expectations after hot UK CPI data

• BoE rate hike expected on Nov 5 (ECB rate hold expected next week)

• Euro weighed down by French debt concerns, higher gas prices

• 10-year French government bond yield rises to 5%, highest since 2002

• Pound set for biggest monthly gain against euro since May 2023

EURGBP

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