• Cable has traded an 18 pip range since 1000 GMT; 1.3215-1.3233

• The base of that range is the lowest level since June 30

• Bear targets include 1.3140 (2026 low, on June 24) and 1.30

• Dollar rally tells Trump Treasury that the 'house' is losing

• US current account deficit widened sharply in the second quarter

• UK retailers cut supplier orders by most since records began in 1983

GBPUSD

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

MUFG Research discusses the key levels to watch in EUR/USD on the downside.

"It was notable yesterday that on a day in which the advance PMIs were stronger than expected EUR/USD continued to slide. The 38.2% retracement support level from the move higher in EUR/USD from the February 2025 low to the January 2026 high comes in at 1.1340 and that to us is the next key support," MUFG notes.

"A test and breach of that level would likely see the move lower in EUR/USD extend into a 1.10-1.12 range," MUFG adds.

Bank of America Global Research highlights the signals form its month-end rebalancing model going into September's fix next week.

"We estimate FX rebalancing needs based on a conventional 60/40 portfolio. Estimates suggest JPY GBP outflows vs EUR inflows," " BofA notes.

"For EUR, the rebalancing flows are moving in the opposite direction to other short-term indicators, suggesting that we may see some consolidation around current levels,

For GBP, both our quant signals and rebalancing flows are bearish, increasing near-term pressure on the currency," BofA adds.

• USD/JPY longs are growing more fearful about renewed intervention since spot broke last Friday's 158.06 high

• Some cash longs switched to options, with 160.00 a popular strike since the initial BoJ decision

• These options can increase in value on continued spot strength and especially if 160.00 breaks

• If BoJ intervene, topside strike options only risk their initial premium, which comes at a discount to downside strikes

• Higher downside strike premiums reflect the markets growing fear of BoJ intervention
USD/JPY 25 delta risk reversals

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

• SNB stood pat on policy, as expected. CPI f/c upgraded marginally, while language on FX saw a minor tweak

• Overall, slightly disappointing those expecting a more hawkish outcome

• In turn, CHF saw a kneejerk move lower on the announcement. USD/CHF bid with spot moving towards 0.8300

• US 10y yields firming again, now 5.15%, adds carry support to USD/CHF, keeping the pair well-supported on dips

• Dips limited to the 100-week MA at 0.8220, followed by 0.8173-0.8200
USDCHF weekly chart

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

• Japanese yen slips to lowest level in three weeks

• USD/JPY has climbed from 157.80 to 158.79, on Thursday, so far

• It has pushed above the 158.62 tech level, 76.4% retrace 160.39-152.89 (Sept) EBS drop

• 'Yield gap' keeps USD/JPY on an upward trajectory

• 160.00 would be unlocked once daily cloud, that spans 159.05-159.60 region, is overcome

• However, Tokyo signals readiness to take joint action against a yen fall if needed

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Daily Chart


Correlation Chart

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

• USD/JPY has risen from 157.80 to 158.49, on Thursday, on the EBS

• Wednesday's close above the broken 157.53 Fibo was a bullish development

• 157.53 Fibo is a 61.8% retracement of 160.39-152.89 (Sept) drop

• There is scope for bigger gains through 158.62 Fibo, 76.4% of same 160.39-152.89 fall

• 'Yield gap' keeps USD/JPY on an upward trajectory, 160.00 is vulnerable

• However, Tokyo signals readiness to take joint action against a yen fall if needed

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Daily Chart


Correlation Chart

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

• GBP/USD has traded a 26.5 pip range thus far Thursday; 1.3223-1.32495

• 1.3223 is lowest level since July 1 (1.3220 was the low that day)

• Wednesday low was 1.32235, as 10-year UST yield rose to 5.13% (19-year high)

• Inflation pressures raise risk of another Fed rate hike on October 28

• US energy secretary Wright says diesel export ban won't work

• UK Treasury open to smaller fiscal headroom to reduce tax hikes, FT reports

GBPUSD

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

• EUR/USD drops below and sustains break of key tech level

• Limit for correction Jun-Aug 1.1325-1.1711 rise was 1.1408

• A test of 2026 low at 1.1325 should follow the drop below

• A fresh 2026 low would heighten chance of a slide toward 1.11

• EUR/USD met 1.1336 target to correct 1.0125-1.2084 rise in June

• Target for a bigger correction is 1.1105 - 50% 1.0125-1.2084

•
EURUSD

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

• EUR/USD option buyers back in force over the last 48 hours and all prices marked higher

• Spot weakness appears to have run further than expected, reigniting volatility and downside hedging

• Risk reversals have seen their EUR put over call implied vol premium lifted across all maturities

• 1-month 25 delta risk reversals reach 0.7 from 0.2 this week - high since the late July peak at 0.9

• That's rewarding those long implied volatility from recent/long term lows - 1-month now 5.5 from 4.7 Monday

• Traded option data shows a big drop in existing positions below 1.1400 which means less FX hedging/support

• Expect further option price increases if 24 June 1.1325 low since May 2025 is threatened/breached

• Related - FX options wrap - EUR/USD downside, USD/JPY intervention risks grow
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


EUR/USD FXO option strikes expiring through end October

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

• GBP steadies in Asia after closing 0.77% lower on Wed, outlook bearish

• Weighed down by hawkish Fed comments, rising odds of October rate hike

• BoE seen lagging Fed as US economy steams ahead, inflation concerns rise

• Higher oil prices, rising US yields weigh on risk appetite, undermine GBP

• UK Treasury open to smaller fiscal headroom to reduce tax hikes, FT reports

• Support at 1.3265-75 lost, opens drop to March-June lows at 1.3140-1.3160

• Resistance 1.3275, 1.3320-25; Wed range 1.3223-1.3345, Asia 1.3223-1.3245
GBP:

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

• AUD/USD -0.2% Thur after AU unemployment hits highest level since Nov 2021

• AU Aug employment +39.5k jobs (poll +20k), 4.6% unemployment (poll 4.5%)

• Iranian President Pezeshkian says still far apart in peace talks with U.S.

• Brent crude back above $100 a barrel, DXY & UST yields significantly higher

• AUD now targets 0.6920 support zone with 18-month uptrend clearly at risk

• RBA monetary policy meeting outcome due Tue, 25 bps hike widely anticipated

• Range Asia 0.7025-45 support 0.6920 0.6865, resistance 0.7282 0.7661
AUD Hourly Bollinger Study & DXY Daily 55/100/200-DMA

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

• Shares of Unico Silver fall 11.8% to A$0.745, their lowest level since August 19

• Stock on track for worst day since March if trends hold

• Silver explorer raises A$60 million ($42.19 million) at A$0.76 per share

• Issue price represents a discount of 10.1% to stock's last close

• Stock down 14.4% YTD, including moves in the current session

($1 = 1.4223 Australian dollars)

(Reporting by Jasmeen Ara Shaikh in Bengaluru)

• USD/JPY to remain bid on dips after closing 0.55% higher on Wednesday

• Boosted by robust US economic data and hawkish comments from Fed officials

• US 10-year yield rallies 15bps to highest since 2007 on inflation concerns

• Chances of Fed Oct rate hike jump to 70% from 55%, underpin USD

• A jump in oil prices on Wed exacerbates inflation woes, will weigh on JPY

• Tokyo intervention resolve to face further tests as BOJ seen lagging Fed

• Japan eyes cut in liquidity-enhancement supply for 5-11 year bonds-sources

• Resistance 158.44, 61.8% of July-Sep decline, followed by 158.96, Sep 3 high

• Support 158.00-10, 157.50-60; Wed range 157.42-158.40, Asia 158.15-158.36
JPY:

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

• NZD/USD -0.9% from Wed 0.5731 high as DXY & UST yields surge higher

• Iran says still far apart in peace talks with U.S., Brent crude +4.3%

• Break below 0.5695-00 confirms NZD trajectory for test of 0.5627 ytd low

• Futures pricing currently implies 68.6% chance of Fed rate hike Oct 28

• Trump meeting Xi Jinping in Washington Thur, markets watching closely

• Range NZ 0.5671-78, support 0.5627 0.5581, resistance 0.5995 0.6012(James Connell is a Reuters market analyst. The views expressed are his own.)

Danske Research maintains a structural bearish bias on USD/JPY.

"The backdrop has shifted in favour of a stronger JPY. A more hawkish BoJ, a meaningful repricing of the rate differential, and growing evidence of carry-trade unwinding have all been supportive of the JPY. While the near-term trajectory may admittedly remain more uncertain amid elevated energy prices, we think the structural case for USD/JPY to trend lower over a 12M horizon remains compelling," Danske notes.

"It rests on a convergence of forces – BoJ tightening, the Fed likely being closer to its peak than the BoJ, carry-trade unwinding, repatriation flows, and eventual normalization of energy prices – several of which are already in motion," Danske adds.

• AUD/USD -1.1% from Wed 0.7117 high as DXY surges to fresh 101.23 8-week high

• AU Aug employment 0130 GMT, poll consensus: +20k jobs, 4.5% unemployment

• Simultaneous breaks below 55-DMA & 0.7073 100-DMA a very bearish signal

• AUD now targeting 0.6920 support zone with 18-month uptrend at risk

• Futures pricing now implies 68.6% chance of Fed rate hike Oct 28

• Iran says still far apart in peace talks with U.S., Brent crude +4.3%

• RBA monetary policy meeting outcome due Tue, 25 bps hike priced in

• Overnight range 0.70265-94 support 0.6920 0.6865, resistance 0.7282 0.7661
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$ soft in NY afternoon trading -0.89% at 1.3226; Wednesday range 1.3346-1.3224

• USD haven bid gaining momentum on rising UST yields and higher oil

• UK 10-yr gilt still below recent high 5.44%, but 15bp range adds to UK fiscal concerns

• High UK rate outlook amid high oil, inflation and low growth conspiring ag GBP bulls

• Sellers may run out of gas, STIR futures indicate BoE hikes in 2027 to outpace Fed

• Still, next month's UK Autumn Budget poses fiscal risks for Burnham

• GBP$ supt 1.3224 Wednesday low, 1.3200 big-figure support, 1.3140 Jun 24 low

• Res 1.3268 falling 10-HMA, 1.3400 psychological lvl, 1.3345 daily high Sept 23

GBP$ Chart:

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

• NY opened near 0.7080 after 0.7117 traded overnight, drop extended in NY

• Sharp US yield gains drove significant US dollar buying

• USD/CNH gains, drops in gold, silver, copper, stocks reinforced the USD bid

• AUD/USD fell away from the 55-DMA, broke the 50% Fibo of the 0.6867-0.7238 rally

• The pair hit a 1-1/2-month low of 0.7027 & sat nearby late, was down -1.18%

• Falling daily, monthly RSIs, September monthly inverted hammer are bear signals

• Pair's hold below the 10-, 21- & 55-DMAs reinforce the bearish signals

• Completion of consolidation of drop from Sep. 9 high adds to bearish sentiment

• Australia's August employment report is a key risk in Asia trading hours
audusd

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

JP Morgan stays sidelined on EUR/USD in the near-term.

"Conviction still remains pretty muted out there but certainly feels like the market is getting long USD as we near the end of the month; looking at flows SHFs are on a strong 5 streak since the Fed while RM have bought 10 of the last 11 sessions, DHF are more mixed but the options market has been quite noisy with EURUSD downside this week," JPM notes.

"Still struggle to chase as we are painting the other side of a frustrating range with a very murky outlook," JPM adds.

(Updates)

• Shares of gold miners fall, tracking decline in bullion prices [GOL/]

• Spot gold down 1.9% at $4,278.10/ounce as hawkish Fed signals bolstered rate-hike expectations, powering the US dollar and weighing on non-yielding bullion

• Dollar at a two-month high makes greenback-priced bullion more expensive for holders in other currencies [USD/]

• Top miners Newmont and Barrick Mining lose 4.2% and 3.5%, respectively

• South African miners Gold Fields , AngloGold Ashanti , Harmony Gold and Sibanye Stillwater

drop between 5.8% and 8.1% each

• Canadian miners: Agnico Eagle Mines dips 4%; Kinross Gold falls 4.2%

(Reporting by Pooja Menon in Bengaluru)

MUFG Research sees a scope for further EUR/USD decline on technical-basis.

"Technically, the backdrop for EUR/USD also does not look good. The trendline support from the intra-day low in February 2025 (when Trump first started to announce his tariff policies) and the intra-day low on 28^th July has been under threat in recent trading days but yesterday broke more substantially below that trendline and signals an extension of the move lower over the coming days.

"EUR/USD 25d risk-reversals all dropped sharply yesterday indicating a shift in sentiment as EUR/USD breaks key levels," MUFG notes

AUD/USD is under significant pressure, having hit a 1-1/2-month low on Wednesday, with further downside possible as the U.S. dollar stays firm on expectations that rising energy prices could push the Fed to hike rates more aggressively than the central bank currently projects.

This dollar strength is being driven by diesel prices, which last week traded at their highest level since April 2022, fueling concerns that inflation will run hotter than expected and force additional rate hikes—not just from the Fed but from central banks globally. Broad-based rate hikes threaten to slow global economic growth, which is particularly concerning for Australia given its heavy reliance on global growth dynamics, and this growing risk of a slowdown is helping drag AUD/USD lower.

Technical indicators are reinforcing this bearish outlook. The pair has completed its consolidation phase following the drop from the September 9 daily high, and today's break lower signals resumption of that downtrend.

Adding to the bearish case, AUD/USD has broken below its 55-day moving average, compounding existing negative signals including its position below the 10- and 21-day moving averages, downward momentum shown in daily and monthly RSIs, and September's inverted hammer candle on the monthly chart.

The pair is now approaching the 50% Fibonacci retracement of the 0.6867-0.7238 rally, and a break below this level could intensify selling pressure. Should that occur, AUD/USD may fall further below its 200-day moving average and potentially test June's monthly low.
audusd

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

Bank of America Global Research previews tommorrow's September SNN policy meeting.

"We expect the SNB to leave the policy rate unchanged at 0% this week. We also expect the reference to FX interventions in the policy statement to remain unchanged, signalling an "increased readiness to intervene in foreign exchange markets."," BofA notes.

There is a risk that the SNB drops the narrative on CHF in order to leverage FX overvaluation as a means to insulate the economy from global energy prices. We do not think that dropping the reference to FX will be positive for CHF. The backdrop remains conducive to vol adjusted carry trades and the emergence of the BoJ from ultra-low rates means CHF has become the natural funding currency in G10. Any bounce on dropping of the FX language should be used as an opportunity to sell CHF," BofA adds.