Oct 13 (Reuters) - EUR/USD could see a much bigger slump as the downside risk continues to grow in part due to a negative technical outlook on the medium-term chart.

The euro saw its fifth straight weekly drop on Friday, as FX traders continued to increase their speculative US dollar long positions.

EUR/USD on Friday registered a second consecutive weekly close below 1.1336, the 38.2% Fibonacci retracement of the 1.0125 to 1.2084 rise on EBS between 2025 and 2026. That has increased the likelihood of a deeper fall to test 1.1104, the 50% retracement of the same move.

The 14-week momentum reading remains negative, highlighting the overall bearish market structure. If the pair slides below the 1.1104 level, that would unmask the 1.1000 psychological level.

The downside bias remains negative while trading persists below last week's 1.1276 high. However, if trading rebounds above 1.1276, that would provide evidence that the downtrend may be nearing an end.
Weekly Chart


Weekly Momentum Chart

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

• Cable has traded a 24 pip range thus far Tuesday; 1.3205-1.3229

• Monday range was 1.3202-1.3261 (high before low)

• 1.3206-1.3250 was Friday range (last below 1.32 on Thursday)

• Britain needs to keep deficit reduction on track, IMF says

• UK PM Burnham hopes for EU deal next month, stirs Brexit debate

• Pound rose to new 16-month high vs euro on Monday; 1.1841

GBPUSD

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

• US/German 10-year bond spread has tightened from 181bps to 171bps

• EUR/USD fell further to a fresh 2026 low at 1.1152 EBS on Monday

• The tighter spread will provide EUR/USD support

• Support from bonds timed when traders short and drop stretched

• Base 20-week Bollinger bands is 1.1193

•
US/German 10-year bond spread

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

• USD/JPY off from 158.75 EBS high yesterday, Asia 158.64 to 158.19

• Into daily Ichimoku cloud between 158.44-64, below 158.56 200-DMA

• Holding for now above 157.97-158.23 ascending hourly Ichimoku cloud

• Ascending 100-HMA in cloud at 158.10

• In area of flattening 100-HMA currently at 158.26, pivot for now?

• $1.3 bln in option expiries at 158.00 also supportive

• Japanese exporter good sellers early Asia, market seen heavy pre-159

• Market could be on hold till US re-open, moves in US yields

• Geopolitical concerns, high oil prices still seen USD supportive

• Related comment , also , for more click on [FXBUZ]

USD/JPY hourly:

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

• USD/JPY down after trade up to 158.75 EBS yesterday, Asia 158.64 to 158.19

• Japanese exporter sales noted, specs too adding to JPY longs up top?

• Geopolitical concerns and high oil prices but nothing really that new

• USD/JPY back into 156.64-158.44 daily Ichimoku cloud after brief fling above

• Market also trading back from still gradually ascending 200-DMA at 158.56

• Support from 157.97-158.17 hourly Ichi cloud, 158.26 100-HMA now above

• Also 158.09 ascending 200-HMA in cloud, $1.3 bln option expiries at 158.00

• EUR/JPY heavy too, Asia 176.75-92 EBS, in recent, lower 176.25-178.33 range

• Resistance from 177.01 hourly Ichimoku tenkan, kijun 177.13, 100-HMA 177.31

• CHF/JPY in stasis, 189.76-190.16, in 189.17-190.82 range since October 8

• Resistance from 189.96 200-HMA area, hourly cloud 190.00-41, 100-HMA 190.07

• GBP/JPY 209.06-67, in recent, lower 208.13-209.98 range since October 8

• Back into 209.05-31 hourly Ichimoku cloud, 200/100-HMAs in area at 209.09/23

• AUD/JPY 110.43 to 110.01 in Asia, backing off from 110.62 high yesterday

• To base of 110.11-37 hourly Ichi cloud, holding mostly above 110.03 200-HMA

• NZD/JPY 88.36-66, in lower range, 88.61-73 hourly Ichi cloud resistance

• Related comment , also , on EUR/JPY

• On Japan CGPI , for more click on [FXBUZ]

USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

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

• Australian gold stocks drop as much as 2.8%, logging their steepest intraday pct fall since October 1

• Bullion prices ease as US dollar holds firm, markets focused on upcoming US inflation report [GOL/]

• Evolution Mining and Northern Star Resources

fall 2.1% and 1.3%, respectively

• Sub-index down 3.8% YTD

(Reporting by Keshav Singh Chundawat in Bengaluru)

• Shares of Australia's iTech Minerals rise as much as 6.5% to A$0.049, their biggest intraday pct gain since October 6

• Gold and antimony explorer reports further drilling results at its Sabre gold project in the Northern Territory

• Co says the latest results expanded a second gold shoot identified earlier this month, highlighting further growth potential

• YTD, stock down 4% including the session's moves

(Reporting by Paridhi Minda in Bengaluru)

• AUD/USD -0.1% Tue as minutes from Sep RBA meeting underscores hawkish theme

• RBA says hikes abroad could loosen domestic conditions via lower AUD

• AU Sep employment due Thur, poll consensus: +20.0k jobs, 4.6% unemployment

• Trump's diesel deal has negligible impact as oil prices remain elevated

• Ukraine says Russia hit energy facilities despite U.S. ceasefire claim

• AUD targets .6865, break would open downside potential significantly

• Range Asia 0.69496-60 support 0.6865 0.6834, resistance 0.7052 0.7282
AUD Hourly Bollinger Study & DXY Daily 55/100/200-DMA

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

• USD bid across board on geopolitical and other factors, USD/JPY no exception

• USD/JPY 158.43-64 EBS so far in Asia, in area of 158.56 200-DMA

• Also in area of 156.67-158.44 daily Ichimoku cloud, 100-DMA 159.50 above

• Spot in move lower from 158.75 high yesterday, low yesterday 158.08

• Japanese exporter offers eyed from ahead of 159.00, importers on dips

• In option expiries, massive at 158.00 today, $1.3 bln, some at 158.75

• JGB-US Treasury rate differentials at recent trough in 2s, near wides in 10s

• Eyes still on Middle East developments, oil prices, US ylds post-US re-open

• US Treasury market, govt offices closed yesterday for Columbus Day

• Related comments , , ,

• And , , also

• Other markets , , ,
USD/JPY daily:


USD/JPY hourly:

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

(Corrects rate in second bullet)

• NZD/USD -0.6% from Mon 0.5619 high as USD buyers regain the upper hand

• Pair bouncing along 0.5581 support line, break below looks inevitable

• DXY trades new 102.61 18-month high ahead critical U.S. CPI update Wed

• WTI +1.4% as fresh Saudi attacks overshadow any Trump diesel deal impacts

• Ukraine says Russia hit energy facilities despite U.S. ceasefire claim

• Futures pricing currently implies 62.8% chance of RBNZ hike on Oct 28

• Range NZ 0.5584-867, support 0.5581 0.5485, resistance 0.5995 0.6012
DXY Daily 55/100/200-DMA


NZD Daily 21/55/100-DMA

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

Danske Research previews the US September CPI report due on Wednesday.

Markets are pricing more than 80% probability of both the Fed and ECB staying on hold in the late-October meetings, so barring major surprises in data or forward guidance, the interest rate differential could remain relatively stable over the next few weeks.But while this week will be a quiet one in terms of economic data, one potential surprise factor could be Wednesday's US September CPI," Danske notes.

"Our forecast is in line with consensus (headline 3.6% y/y, core 2.5% y/y), but as the CPI will be the final major data point before the rate decision, it could carry even more weight for markets than usual," Danske adds.

• Analysts at Jefferies maintain "hold" rating for global miner BHP Group , at a price target of A$65 per share

• BHP's recent operational performance across most of its portfolio has been encouraging, though valuation and exposure to iron ore underpin its neutral stance - Jefferies

• Brokerage says higher freight rates to China, diesel inflation and weaker iron ore prices are likely to pressure margins in BHP's Western Australia iron ore operations, leaving earnings from business an overhang on the stock

• Adds visibility on timing and direction of BHP's copper growth projects remains key investor focus, with co's diversified pipeline providing multiple growth options

• Expects copper earnings to continue outpacing iron ore earnings, supported by stronger copper prices and production growth projects

• Six of 22 analysts rate the stock "buy" or higher, 15 "hold" and one "sell" or lower; their median PT is A$62.02 – LSEG-compiled data

• Stock up 37.2% YTD, as of last close

(Reporting by Rudrannsh Mehra in Bengaluru)

• GBP$ soft in NY afternoon trade, -0.2% at 1.3210; NorAm range 1.3238-1.3202

• Liquidity light given US holiday, no US cash bond trading; UST futures prices a touch lwr

• Pair dripped lower throughout the session; US-Iran situation fluid, oil +2%

• US CPI on October 14, UK GDP and output on the 15th in focus

• LSEG's IRPR indicates BoE to hike in early Nov; Fed seen hiking in early-Dec

• GBP$ supt 1.3202 Monday low, 1.3140 2026 low on June 24, 1.3099 lwr 30-d Bolli

• Res 1.3231- 10-DMA, 1.3261 Monday high, 1.3290/1.33 falling 21-DMA/psychological lvl

GBP$ Chart:

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

(In line 4 corrects to 17-month low)

• NY opened near 1.1180 after 1.1217 traded overnight, the drop then extended

• USD buying weighed on the pair as did USD/CNH's lift off its session low

• Oil gains and drops in gold, silver, equities added weight on EUR/USD

• The pair hit a fresh 17-month low of 1.1154 and sat nearby late in the day

• EUR/USD traded down -0.36% in NY's afternoon which helped keep techs bearish

• RSIs. widening Bolli bands, inverted daily hammer candle are bearish signals

• EUR/USD's hold below downward sloping 10-,21-, 55- & 200-DMAs is also bearish
eurusd

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

Goldman Sachs Research flags a scope for a EUR tactical recovery over the coming week.

"We think the scale of the sell-off over the past month specifically makes it important to differentiate the longer-term challenges from the tactical outlook, where we are wary of extrapolating the move lower in EUR/USD. Part of this is due to an alignment of positive recent drivers on the Dollar side of the equation that look more difficult to sustain at the same pace going forward," GS notes.

"While scrutiny on fiscal fundamentals is currently centred on France and the Euro, other major currencies (Dollar, Yen, and Sterling included) have all faced at least bouts of similar pressures at some point over the past year. Together, this balance of factors implies some scope for a stabilisation and a tactical recovery in the broad Euro in the weeks ahead, even if longer-term challenges remain," GS adds.

Dollar bulls have regained control as a combination of heightened geopolitical tensions, concerns over European sovereign debt, and a heavy week of event risk boosts demand for the greenback.

Investors face a packed week of event risk, with U.S. corporate earnings, Wednesday's CPI report and remarks from several officials, including Fed Chairman Kevin Warsh and potentially BOJ Governor Kazuo Ueda. Stronger-than-expected inflation data and higher oil prices could bolster expectations for additional Fed tightening, providing further support for USD/JPY.

Against a backdrop of broad-based dollar strength and USD/JPY's break above its 200-day moving average at 158.55, focus is shifting toward the nearby Ichimoku cloud top, the Sept. 24 high at 159.03 and the key psychological 160 level, where Japanese exporter offers are expected to emerge. Further gains could also trigger the capitulation of speculative shorts established on expectations of additional BOJ rate hikes and renewed intervention, adding fuel to any upside extension in USD/JPY.

Sustained USD/JPY strength would raise intervention and BOJ response risks, but subdued implied volatility suggests markets remain complacent despite past interventions often occurring around major policy and international meetings, including this week's IMF and G20 gatherings. Comments from BOJ Governor Ueda could provide important policy signals, with any failure to deliver a sufficiently hawkish message posing a notable risk to yen bulls and potentially encouraging a fresh leg higher in USD/JPY.
Yen

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

ANZ Research discusses AUD outlook for the week.

"This week's Australian releases may matter more for other AUD crosses, while the outright direction of AUD/USD is still likely to be determined offshore.

Domestically, the labour market report is likely to be the most important release. We expect 15k growth in employment and a 4.6% unemployment rate. Stronger-than-expected employment or a stabilisation in the unemployment rate would reinforce expectations that policy may need to become more restrictive and would therefore support the AUD through the rates channel. Conversely, a softer labour market report would likely see some November tightening expectations priced out further, particularly given recent signs that activity is slowing," ANZ notes.

"The RBA minutes are likely to be scrutinised for signs that September's hike was not a one-off adjustment. Markets will focus on the Board's assessment of inflation persistence, energy-price risks and spare capacity in the economy," ANZ adds.

Sterling's forward path looks increasingly captive to an event-heavy calendar, with entrenched positioning leaving GBP/USD confined to a modest 1.3180–1.3280 range in recent sessions.

Brief reactions to geopolitical news in the Middle East have been fleeting, demonstrating a lack of conviction to break out of this established channel. The market seems to be in a holding pattern, with traders hovering around 1.3200-1.3280, perhaps reflecting a gamma trading environment ahead of significant UK economic releases.

The upcoming GDP and output data on October 15, followed by UK CPI on October 21, may provide crucial insights into the health of the UK economy and the likely trajectory of BoE monetary policy. These data points will set the stage for the Autumn Budget on October 28, where Prime Minister Andy Burnham and Chancellor John Healey face the challenge of presenting a budget that addresses fiscal concerns without exacerbating them.

Adding complexity to the GBP/USD landscape is Burnham's increasing rhetoric on Brexit, particularly discussions surrounding alleged Russian interference and the prospect of closer ties with the EU.

Should negative sentiment gain traction, and the Autumn Budget disappoint, it could accelerate a decline toward 2026 lows at 1.3140 and possibly November 2025 lows near 1.30, underscoring the fragile state of the pound amid a dynamic political and economic backdrop.
GBP$ Chart:

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

Societe Generale Research likes short EUR exposure vs AUD and NZD.

"The week's main non-geopolitical event comes on Wednesday with the release of US CPI. If we see a pickup in core inflation to 2.5% (the market consensus), there will be little chance of any shift in market expectations: no rate hike this month, but a very strong chance of one in December and another in Q1," SocGen notes.

"Watching EUR/AUD, which bounced after drifting below 1.64 this morning. There are plenty of arguments for shorting European currencies against the AUD (and the NZD)," SocGen adds.

Bank of America Global Research previews the US September CPI report due on Wednesday.

"Core CPI likely slowed to 0.2% m/m (2.5% y/y) in September after August's stronger reading, with headline CPI spiking by 0.6% due to higher gas prices. We estimate core PCE inflation at 0.22% m/m and 3.0% y/y, a pace still above the Fed's target but not necessarily strong enough to alter near-term policy expectations," BofA notes.

"However, risks are tilted modestly to the upside from airfares, wireless service pricing, and AI-related demand for electronics. A stronger 0.3% m/m core CPI print would put October back in play," BofA adds.

• EUR/USD rallied to 1.1217 in Asia, sellers emerged, the pair then turned lower

• NY opened near 1.1175, a fresh session low, the pair was down -0.23%

• USD buying, US yield gains weighed on the pair

• Wider German-French yield spreads added weight

• Gains in oil & drops in gold , silver also weighed on EUR/USD

• Techs are bearish; pair is below the 10-DMA, RSIs indicate downward momentum

• Widening Bolli bands, consolidation of drop from Sep. 25 high add to bear signs
eurusd

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

• AUD/USD gapped down to open the week then traded 0.6969-0.6995 overnight

• An 8-session high traded before the pair fell and then turned lower

• NY opened near 0.6970, AUD/UDS traded down -0.15% in early NY action

• USD, US yield gains & USD/CNH's lift off its low weighed on AUD/USD

• Drops in gold and silver helped put additional weight on the pair

• AUD/USD's price action has daily charts suggesting the recent rally is near an end

• A daily gravestone doji formed and daily RSI diverged on the earlier high

• A bear pennant continuation pattern is in place on daily charts, reinforces bear signs

• Rising monthly RSI, bull pennant on monthly chart gives bulls some comfort
audusd

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

• Crude oil rises from around $102pb toward $106 pb on Monday

• EUR/USD sinks from 1.1217 to 1.1185 EBS

• The 2026 low at 1.1161 is nearby

• Mid-point 1.0125-1.0208 rise (Feb 2025-Jan 2026) is 1.1105

• The 200-WMA is 1.1102

• Target for a break below 1.1105 is 1.0873

• USD's rise could pressure carry trades

•
EURUSD

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

• Overall bias remains on the upside as USD/JPY usually climbs in October

• The 14-day momentum reading is positive, highlighting the bullish bias, 160 a target

• USD/JPY has seen a 158.08-158.47 range, on Monday, according to EBS data

• Spot is trading within the daily cloud, that currently spans the 157.22-159.02 region

• Buy stops likely clustered above the cloud top are vulnerable, could get hit

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

Daily Chart


Correlation Chart

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