• Cable rose to 1.35445 during the London morning as dollar sank against yen

• 1.35445 is five pips shy of Friday's peak (scaled before NFP beat boosted USD)

• USD/JPY slid to EBS seven-month low of 154.05 during the London morning

• 1.3521 was Asian session high for GBP/USD (1.3482 was Friday's low)

• UK finance minister Healey seeks to set out brighter vision before tough budget

• UBS forecasts 25 bps Fed rate hikes in both September and December

GBPUSD

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

Sept 7 (Reuters) - USD/JPY bears could tighten their grip on this market if they manage to force a daily close below a broken Fibonacci level.

After recently hitting a four-decade low against the dollar, the tide appears to be turning for the battered yen as a host of factors smoke out brash traders who had spent years betting against the Japanese currency.

While USD/JPY has fallen through the 154.78 Fibo, a 38.2% retrace of the 139.89 to 163.99 (April to July) EBS rise, bears need spot to end trading this week below this broken level. That would increase the likelihood for a bigger drop to initially test the 151.94 level, a 50% retrace of the same 139.89 to 163.99 rise. Especially as the 14-week momentum reading turned negative last week.

However, if USD/JPY does not register a weekly close under the 154.78 Fibo that would hint at a bear-trap, which is set when a market breaks below a technical level but subsequently reverses and is usually a bullish sign.
Weekly Chart

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

• Yen's changing fortunes might finally be spooking the bears

• Takaichi's reflationist aide projects Bank of Japan rate hike in September

• USD/JPY has slumped from 156.30 to 154.05, on Monday, on the EBS

• Spot's third-largest daily drop of 2026, last Thursday, continues to weigh

• Fourteen-day momentum reading is negative, reinforcing the overall bearish market structure

• 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 drops sharply from 156.30 to 154.32 EBS

• Weekly ichimoku cloud spans 154.62-149.90

• Thick cloud represents an area of strong support

• Average USD/JPY rate f/c by Japanese firms for 2026/27 is 152.57

• Drop stretched below 154.87 base 20-week Bollinger bands

•
USD/JPY

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

• Last weeks sharp USD/JPY drop boosted FX option prices to late July intervention led highs

• Benchmark 1-month implied actually exceeded the late July peak at 10.5 after spiking from 7.15 to 10.65

• 1-month 25 delta risk reversals jumped 1.75 to 2.75 JPY calls over puts amid a surge in downside strike demand

• FX option prices/implied vols have eased as spot now consolidates, but they remain well above prior lows

• 1-month implied 9.55 and 1-month 25 delta risk reversals 2.4, while other expiry dates/contracts follow suit

• Related trade flows still outweigh that seen in other currency pairs in Asia/early London Monday

• Related - FX options wrap - USD/JPY warning as NFP fails to shift the dial
USD/JPY 25 delta risk reversals


USD/JPY FXO implied volatility

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

• Cable has traded an 22.5 pip range thus far Monday; 1.35075-1.3530

• 1.3530 is also high water-mark since Friday's NFP data beat spurred low of 1.3482

• UK's new finance minister Healey makes his first major speech on Monday

• Healey will announce his first budget next month (October 28)

• UK house prices fall for first time since November 2023, Lloyds data shows

• CFTC data: net GBP short rose 11% to 49,575 contracts in week to Sept 1

GBPUSD

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

• Shares of Australia's Green & Gold Minerals fall as much as 7% at A$0.130, hitting their lowest level since August 21

• Stock headed for its biggest pct fall since August 31, if trends hold

• Gold exploration and development company announces a pro-rata renounceable entitlement offer to raise about A$3.2 million

• Offer is priced at A$0.10 per share, representing a 28.6% discount to the stock's last close on September 4

• Company says proceeds from the offer will be used to fund exploration at company's existing projects and as general working capital

• Stock down 31.6% YTD, including session's moves

(Reporting by Shravya Marakini in Bengaluru)

• AUD/USD flat Mon as investors ponder global inflation and interest rates

• RBA officials Sarah Hunter and Andrew Hauser speaking in Sydney Tue

• Futures pricing implies 67.4% chance of Sep 29 RBA rate hike

• Aug U.S. inflation updates critical, PPI due Wed followed by CPI on Thur

• Trump's attempted interference with Fed policy having limited impact

• AUD targeting 0.72825 50-month high, topside potential rises markedly above

• Range Asia 0.7197-11 support 0.6920 0.6866, resistance 0.7215 0.7277-82
AUD Daily 21/55/100-DMA

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

• GBP/USD down 0.1% in cautious Asian trading after closing unchanged Friday

• Undermined by robust U.S. jobs data on Fri which boosts Fed rate hike bets

• Expectations of a 25 bps Sep Fed rate hike jumps to 58.3% from 49.4% Thu

• U.S. PPI Thu, CPI Fri key; will determine whether Fed hikes rates on Sep 16

• UK has a busy Fri; July GDP, industrial and manufacturing output, trade due

• Parliamentary testimony of BoE Governor Bailey, other policymakers eyed Tue

• UK finance minister Healey seeks growth through decentralising power

• UK recruiters see first rise in permanent role hiring since 2022

• Strong support at 1.3470-75, then 1.3444-47 where 100 & 200-day MAs converge

• Resistance 1.3550, 1.3570, 1.3600; Friday range 1.3482-1.3549

• Asian range 1.3507-1.3521; U.S. markets closed for a holiday
GBP:

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

• AUD/USD +0.1% Mon, edges towards key 0.7210-15 resistance zone in Asia

• Pair targets 0.72825 50-month high, topside potential rises markedly above

• Aug U.S. inflation updates now pivotal, PPI due Wed followed by CPI on Thur

• Trump threatens to stop trading with some countries unless FOMC cuts FFR

• Weekend U.S.-Iran flare up having limited early week impact

• RBA officials Sarah Hunter and Andrew Hauser speaking in Sydney Tue

• Range Asia 0.7197-11 support 0.6920 0.6866, resistance 0.7215 0.7277-82
AUD Daily 21/100/200-DMA

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

• USD/JPY holding in lower range established Friday, range then 155.25-156.75

• Inside day a possibility in Asia today, so far 155.97-156.30 EBS

• Massive $1.1 bln in option expiries today at 155.75 likely supportive

• Also 155.95-156.00 total $477 mln, some smalls up to 157.00 $501 mln

• USD/JPY now holding below wide, 156.40-157.82 hourly Ichimoku cloud

• Tenkan at 156.13 and kijun just below at 156.05

• IMM CTA increase in JPY shorts before fall last likely added to yen rally

• Japanese exporter likely to continue to sell rallies, importers buy dips

• Interesting twist in JGB-US Treasury interest rate differentials

• Diff in 2s narrow to @250 bps but that in 10s wider to @184 bps

• Could be quiet one in Asia ahead of the London, New York re-opens

• Tokyo likely to be quiet given weather-related transport problems, closures

• Middle East situation a concern, shifting central bank expectations too

• Strong US jobs report seen putting a September Fed hike back on table

• Related comments , , ,

• And , also , on IMM CTAs

• US markets , , ,

• On Middle East , , for more click on [FXBUZ]

USD/JPY:

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

• NZD/USD flat early Mon, as markets largely ignore latest U.S.-Iran flare up

• Trump threatens to stop trading with some countries unless Fed cuts rates

• U.S. Aug non-farm payrolls +162k (poll +56k), adds to Fed hike expectations

• Aug U.S. inflation data now critical, PPI due Wed, and CPI on Thur

• RBNZ Assistant Governor Silk speaks Wed, followed by Governor Breman on Thur

• NZD targets .5762 support, but break above 0.5907 21-DMA would shift outlook

• Range NZ 0.5880-879, support 0.5762 0.5627, resistance 0.5995 0.6012
NZD Daily 21/100/200-DMA

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

• AUD/USD +0.1% in early Asia, battling to clear 0.7210-15 resistance zone

• Market reaction muted after U.S. & Iran exchange fire over weekend

• AUD targets 0.72825 50-month high, break above will open topside materially

• Futures pricing now implies 71.0% probability of Sep RBA hike

• U.S. Aug non-farm payrolls +162k (poll +56k), fans FFR hike expectations

• Attention swings to pivotal U.S. Aug PPI (due Wed) & CPI (due Thur)

• RBA officials Sarah Hunter and Andrew Hauser speaking in Sydney Tue

• Range Asia 0.7197-05 support 0.6920 0.6866, resistance 0.7210-15 0.7282
AUD Daily 21/55/100-DMA

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

• USD IMM net spec long -$0.41bn in Aug 26-Sept 2 reporting period; USD IDX+0.75% in period

• EUR$ -0.7% in period; specs +11.4k contracts now -24.9k; Ecb set to hike Sept 10

• $JPY +0.64%; specs -28.9k contracts now -92.2k; BoJ policy uncertainty weighed on JPY

• GBP$ -0.98%; specs -5.1k contracts now -49.6k; UK fiscal concerns, hawkish Fed USD positive

• $CAD +0.43% in period; specs +13.4k contracts now -108.1k; US-CA tariff angst stalls CAD bid

• AUD$ -0.27%; specs +5k contracts now -39.4k; AU rate advantage tempers weakness vs USD

• Since period close yen has rallied on more-hawkish BoJ view; USD higher after abv-f/c payroll data

Majors w/IMM Performance Chart:


IMM Position Table:

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

• GBP$ a tad soft in NY afternoon -0.04% at 1.3514; NorAm range 1.3538-1.3482

• Pair saw considerable yaw after US payrolls upside surprise; upbeat earnings

• On its own the data stoked inflationary tones, front and long-end yields ticked higher

• Initial dip toward Wed's trend low found support ostensibly on weekend position squaring

• Markets now shift focus to Sept 11 US CPI and Sept 16 UK CPI for inflation confirmation

• Other hot topic, UK fiscal angst tempers as UK 10-yr gilt yields slips to 5.14% from 5.29%

• GBP$ res 1.3550 Friday high, 1.3560 falling 10-DMA, 1.3602 daily high Aug 27

• Supt 1.3509 the rising 30-DMA, 1.3475 daily low Sept 2, 1.3446 flat 200-DMA

GBP Chart:

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

Goldman Sachs summarizes USD/JPY outlook.

"If US data comes in softer, or the Fed isn't able to hike, and in combination with that, the BOJ come across more hawkish, you can see USDJPY continue to grind lower. But it really is all about this shift from the GPIF which really gets us lower into the 140- 145 range over the next 6-12 months," GS notes.

"Provided we stay sub-157 in the coming session, people will have the opportunity to resell, and  we can continue this downward trajectory, but watch out for a spike back above that 157.10-157.25 area," GS adds.

• EUR/USD 1-week expiry options include today's US jobs data, 10 Sep ECB and 11 Sep US CPI data

• 1-week expiry implied volatility has increased from 5.0 to 5.5 after including the latter

• That still appears low when compared to 1-week daily realised volatility at 6.05

• Realised volatility is actual volatility over the previous 1-week and can offer a fair value measure for coming period

• Current implied vol pricing suggests a greater chance of actual/realised volatility outperforming it over the next week

• Volatility can be monetised by constantly adjusting an opposing cash hedge to the option position which offsets currency risk
1-week EUR/USD FXO implied vs realised

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

CIBC Research discusses today's US August jobs report.

"The US labor market sprung back to life in August. Total non-farm payroll employment increased by 162K in August, beating consensus expectations of 55K. July’s contraction was revised up to 21K. The June and July combined revision was +55K. The unemployment rate held steady at 4.1% as participation increased. The participation rate ticked up to 61.6% after two consecutive monthly declines, led by a large jump in participation rate in youth while prime-age held steady. Job growth was led by food services and drinking places and local government education (which largely reversed a July decline). The information industry lost 23K jobs, driven by cuts in computing infrastructure/data processing. Average hourly earnings rose 0.3% m/m in August but year-over-year earnings declined from 3.2% to 3.1%. Although the unemployment rate remained at 4.1% in August, it shows a small rebound in second decimal (July 4.09% to 4.14% in August)," CIBC notes.

"Although today’s payroll job gains were higher than expected, the unemployment rate was essentially unchanged and wage growth kept decelerating on an annual basis. That is still roughly consistent with the stable labour market described in the FOMC minutes in July. That means the decisive data point for the upcoming FOMC meeting later this month will come from the August CPI report next Friday. If that report comes in largely in line with no pick up in core CPI, that will likely provide the go-ahead for many voting members waiting on confirmation of signs of disinflation to vote for a hold," CIBC adds.

• Shares of gold miners down, tracking lower bullion prices [GOL/]

• Spot gold down 0.6% at $4,446.58/ounce, on track for a mild weekly decline

• Gold prices fall after stronger-than-expected U.S. jobs data boosted expectations that the Federal Reserve could raise interest rates as soon as this month, denting non-yielding bullion's appeal

• Bullion down more than 2%, hitting an intraday low of $4,364.99/ounce, after the data

• Top miner Newmont and Barrick Mining down 1.4% and 1.3%, respectively

• U.S.-listed shares of South African miners: AngloGold Ashanti , Harmony Gold and Sibanye Stillwater

decline between ~1% and 2%

• Canadian miners: Agnico Eagle Mines and Kinross Gold each down ~1%

(Reporting by Pooja Menon in Bengaluru)

Bank of America Global Research discusses the last COFER release.

"The USD reserve share rose in Q1, but much of that reflected a firmer USD rather than fresh buying. Adjusting for exchange-rate and bond-market moves gives a truer read of what reserve managers actually did. Underlying demand was broader than the optics. Once valuation is stripped out, reserve managers were net buyers of the dollar - but also added to GBP and EUR holdings," BofA notes.

"The EUR reported dip was essentially a price-driven story, not active selling. If anything, data from European govt bond syndications and the German finance agency showed increased buying by central banks this year," BofA adds.

ANZ Research discusses NZD outlook for the coming weeks.

"The only domestic data next week will be the BusinessNZ Performance of Manufacturing Index for August. The PMI has been consistent with expansion in the manufacturing sector since last July and shown particularly strong readings since May. In July, the figures softened after reaching a near five-year high in June, but readings still indicate a firm and broad expansion in output. That said, we think it will take a strong change to shift the NZD noticeably. Considering we have a slight upside bias for the USD in the week ahead, NZD/USD is likely to remain in its new lower range of 0.5850–0.59, and any downward momentum in risk appetite might see it breach 0.584, its 50-dma," ANZ notes.

"On the crosses, EUR/NZD has been trading near 1.96 since the middle of July. Following the RBNZ meeting, the pair has soared to 1.98. In the runup to the ECB rates decision next week, we think there is scope for some downward movement. A hike is fully priced in, but if the central bank fails to signal further tightening, we might see the pair move towards key support at 1.952," ANZ adds.

• Cable has traded a 21.5 pip range thus far Friday; 1.3523-1.35445

• 1.3548 was Thursday top after dovish Waller guidance weighed on dollar

• Markets currently see Fed rate decision on Sept 16 as coin toss for hold/hike

• U.S. jobs report due at 1230 GMT; August NFP f/c at 56k; jobless rate f/c 4.1%

• Soft U.S. employment data might inflate GBP/USD towards 1.36

• 1.3475 was three-week low on Wednesday, which a Fibo level helped define

GBPUSD

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

• Recent sharp USD/JPY falls have seen FX option prices test/match post intervention extremes from late July

• Benchmark 1-month expiry implied volatility actually broke the late July 10.5 peak to trade 10.65 on Friday

• That's a huge increase from levels around 7.15 ahead of the spot slide from the upper 159s to 155.25

• Risk reversals were ramped higher, too - benchmark 1-month 25 delta from 1.75 to 2.75 JPY calls over puts

• That contract peaked 3.0 in late July - its highest since April 2025 - driven by outright demand for JPY call strikes

• 3-month expiry 25 delta risk reversals broke their late July highs at 1.9 for 2.05 - last seen January 2025

• Those already long JPY calls well rewarded this week, strikes as low as 150.00 in demand over last 24 hours

• Bottom line - The FX options market is protecting against ongoing volatility and deeper USD/JPY declines
USD/JPY FXO implied volatility


USD/JPY 25 delta risk reversals

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

• EUR/USD lows rising: Jul 13 1.1325, Jul 28 1.1353, Aug 13 1.1512

• This week's low 1.1566

• Pair currently retesting 200-DMA at 1.1634, Friday range 1.1623-33

• Potential for week to end with a bullish close over 200-DMA

• The 21-DMA at 1.1606 may cross above 200-DMA - buy signal

• Traders are short of euros , growing probability of a squeeze

•
EURUSD

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