• USD/JPY has seen a 157.86-158.51 range, on Wednesday, according to EBS data

• Spot continues to hover below the daily cloud that currently spans 159.43-159.60

• 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 is vulnerable

• However, there is said to be aggressive Japanese exporter offers/sales in the 159, 160 vicinity

• While EUR/JPY has been offered recently compared to USD/JPY, positive correlation is still high

USD/JPY Chart


EUR/JPY Chart


Correlation Chart

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

(Adds charts )

• A break of huge 1.1000 option barriers/triggers could flip EUR/USD option positioning to short gamma

• Short gamma would drive downside short covering via spot and options and increase volatility

• FX options continue to hedge the risk via binary and digital options - recall HF demand led the charge last week

• Implied vol and and EUR puts eased as spot recovered mid 1.12's Tuesday but still well above prior lows

• Latest spot dip sub 1.1200 reignites demand - 1-month implied vol 6.6 - after 7.3 to 6.25 setback Mon-Tues

• 1-month 25 delta risk reversals back over 1.0 and 3-month paid 1.0-1.15 EUR puts over calls
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals

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

• Panic over for now but options still price EUR/USD downside risk; spot holds above 1.1200 after Monday's 1.1161 low

• Implied vols lower: 1-month settles 6.35 from Monday's 7.3 high since March and 1-year eases to 6.9 from 7.3

• However, current levels still high by comparison to 1-month multi year low at 4.5 in mid-September, with 1-year around 6.0

• Premium for EUR puts over calls via risk reversals is lower too - 1-month 0.95 after testing the March peak at 1.7

• However, that's still a solid downside strike risk premium when compared to a neutral directional bias in mid September

• Huge 1.1100 - 1.1000 option barriers mark the danger levels - a break below risks deeper and more disorderly declines

• Related - EUR/USD: Relief rally - sellers await
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals-

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

• EUR/USD rose to 1.1276 on Tuesday meeting target for a minor correction

• A 23.6% retrace drop from 1.1645 on Sep 9 to 1.1161 Oct 5 is 1.1277

• An oversold situation has been alleviated and pair has dropped on Weds

• On Wednesday's pair down from 1.1262 to 1.1223 EBS

• Oil has climbed around $3 pb since Weds weighing EUR/USD

• Downside target off Sep 9 high, Oct 5 low and Oct 6 recovery high is 1.1088

• *

EURUSD target


EURUSD correction

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

• FX option strikes expire at 10am New York/14:00 GMT on Wednesday Oct 7

• EUR/USD: 1.1170-80 (705M), 1.1200-05 (1BLN), 1.1240-50 (2BLN), 1.1255-60 (2.2BLN), 1.1265-70 (1.1BLN), 1.1300 (3.6BLN)

• USD/CHF: 0.8200 (200M), 0.8380 (298M). EUR/CHF: 0.9375-80 (333M)

• GBP/USD: 1.3250 (291M), 1.3275-85 (210M). EUR/GBP: 0.8460 (420M)

• AUD/USD: 0.6925-30 (394M), 0.6935-40 (1.3BLN), 0.7050 (705M)

• NZD/USD: 0.5550 (615M), 0.5700 (296M), 0.5750 (300M), 0.5775 (682M)

• USD/CAD: 1.4180 (300M), 1.4200 (377M)

• USD/JPY: 157.90-158.00 (1BLN), 158.10-20 (468M), 158.30 (361M), 158.95 (281M)

• FX options wrap - Vols take a breather as risks simmer (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Shares of BOA Resources advance as much as 25.8% to A$0.195, their highest since late April 2022

• Copper explorer says copper found in 20 of 23 drill holes reported so far at its Ricci Lee prospect in Western Australia

• Around 8.8 million shares traded, ~4.5 times the 30-day average

• YTD stock up 533.3%

(Reporting by Swetha Lakshmi)

• Rox Resources jumps nearly 9% to A$0.685, a more than five-year high

• Stock posts its biggest intraday pct rise since August 20

• Critical minerals developer reports high-grade infill drilling results at its Youanmi gold project in Western Australia

• RXL adds that the top six levels of the United North deposit are sufficiently drilled to support production planning and mine development

• Stock up 35.3% YTD, including the session moves

(Reporting by Rudrannsh Mehra in Bengaluru)

• Shares of Australia's First AU rise as much as 12.5% to A$0.180, hitting their highest level since September 24

• Stock logs its biggest intraday pct gain since September 30

• Co commences drilling at its First Hit gold mine, located within its Riveria East gold project in Western Australia

• Stock up over 20% this year, including the day's move

(Reporting by Rajasik Mukherjee in Bengaluru)

• Australian gold stocks rise as much as 2.3%, set for their best day since Sept 30

• Gold stocks rise as bullion prices gain, supported by a pause in the US Treasury yield's rally and a weaker dollar [GOL/]

• Gold miners Evolution Mining and Northern Star Resources jump 2% and 3.5%, respectively

• YTD, AXGD down more than 2%

(Reporting by Aamir Sheik Khalid in Bengaluru)

• USD/JPY buoyant and back on 158 handle, Asia so far 158.07-40 EBS

• Still towards top of recent core range between daily Ichi kijun, 200-DMA

• 200-DMA 158.52 and market seen heavy above, daily kijun flat at 156.64 below

• Daily Ichimoku cloud 159.42-59 but looking to decline, to 156.64-158.44 soon

• Potential for USD/JPY to break back above cloud

• Spot tracking away from 157.95 100-HMA, 157.62-94 hourly Ichimoku cloud

• $1.2 bln option expiries between 158.00-20 providing gravitational pull

• Also $663 mln between 158.30-60 strikes, $1.3 bln today on 157 handle

• JGB-US Treasury 2-year rate differentials off recent highs, in 10s wider

• Reflationist new BOJ Policy Board member Sato now says supports rate hikes

• Sato dissented at last BOJ meeting in favor of hold alongside newcomer Asada

• Sato thus more likely to support another BOJ hike come December

• That said, fresh Nikkei gains could again see fresh JPY currency hedging

• As to Japanese exporters, more aggressive sales seen on better bid USD/JPY

• Related comments , , , also

• US markets , , ,

• On BOJ Sato , , Fed-speak

• On US economy , for more click on [FXBUZ]

USD/JPY:


Nikkei 225:


JGB-US Treasury 10-year interest rate differential:

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

• NZD/USD +0.6% from Tue 0.5590 low, but down cumulative 6.1% since Aug 21

• Pair targets 0.5581 support, clean break would prompt slide toward 0.5845

• U.S. imports +4.3% in Aug to record high as trade deficit widens 13.7%

• U.S. equities stay upbeat ahead of Q3 earnings season starting next week

• Fed meeting minutes due Wed, DXY & UST yields softer as bond fear moderates

• RBNZ Governor Anna Breman speaks Thur, Karen Silk panel discussion Fri

• Range NZ 0.5622-28, support 0.5581 0.5485, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA

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

MUFG Research discusses EUR outlook on the back of  Spanish Snap Election on Nov-29.

"The main development in the euro-zone yesterday was the announcement from Spanish Prime Minister Pedro Sanchez that he has decided to call an early election for 29th November. It comes after parliament rejected his minority government’s housing plan last week which had fuelled speculation over a snap election. The government’s current term began in 2023 and was due to run until July 2027," MUFG notes.

"The latest opinion polls have been indicating that the centre-right People’s Party are well positioned to positioned to become the biggest party after the election although would require support from other parties without a majority. PP leader Alberto Nunez Feijoo has indicated that they could govern with the radical-right VoX party. While the snap election adds to political uncertainty in the euro- zone in the near-ter, we do not expect the outcome to materially add to downside risks for the euro," MUFG adds.

• AUD/USD +0.3% from Tue 0.6962 low in an extension of modest wtd gains

• U.S. trade deficit +13.7% in Aug, imports +4.3% to record high of $420.8 bln

• Gold +0.6%, DXY -0.3%, & UST yields lower; Fed meeting minutes due Wed

• U.S. equities stay upbeat ahead of Q3 earnings season starting next week

• AUD sellers likely to emerge ahead of 0.7054 100-DMA, 0.6865 downside target

• Overnight range 0.6962-90 support 0.6904 0.6865 0.6834, resistance 0.7282
US Trade Balance


AUD Daily 21/55/100-DMA

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

• GBP$ firm in NY afternoon, +0.36% at 1.3272; Tuesday range 1.3286-1.3202

• Bid near 1.32 since late-September intact, USD under pressure as global yields slip

• Risk rallied broadly as French fiscal concerns ebb 10-yr OAT -13bp, UK 10-yr Gilt -2bp

• UK inflation, high yields a concern ahead of UK CPI Oct 21, Autumn Budget Oct 28

• LSEG's IRPR sees BoE +22bp in Nov, total of +36bp by Dec MPC; Fed +26bp by Dec

• GBP$ res 1.3286 Tuesday high, 1.3311 daily high Sept 30, 1.3349 falling 21-DMA

• Supt 1.3238 the 10-DMA, 1.3202 Tuesday low, 1.3181 daily low Oct 1

GBP$/Glbl bonds Chart:

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

• NY opened near 1.1240 after 1.1203 traded overnight, rally extended in NY

• USD, US yield drops & tighter US-DE spreads

buoyed

• Oil, USD/CNH drops & rallies in gold, silver and stocks also contributed to the lift

• 1.1276 traded; USD firmed a bit & EUR/USD neared 1.1260 late, up +0.32%

• Rising daily RSI, rally after Monday's bull hammer are concerns for EUR/USD bears

• The long lower wick on October's monthly candle is also a concern for bears
eurusd

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

Credit Agricole CIB Research discusses USD/JPY outlook into year-end.

"We cannot possibly know how the GPIF will change its asset allocations. The pension fund will be reporting its Q2 performance in early November and could announce any reallocations then. Looking across our potential reallocations, USD/JPY’s short-term fair value ranges from about 140-150 with a median of 148. If we were forced to choose the most likely scenarios, which we need to do to forecast, we would focus on allocations towards domestic bonds between 31-35% in combination with no change to a modest rise in the allocation to domestic equities of 31%," CACIB notes.

"We doubt the GPIF would want to allocate much more than 60% of its AUM to domestic assets. So, we expect USD/JPY to track lower to 150 by end-2026 given this would lead to a fall in USD/JPY’s short-term fair value to between 148-150," CACIB adds.

• NY opened near 0.6965, the pair was down slightly in early NY action

• A rally ensued however as USD selling & US yields

sank

• Gold, silver, copper & stocks rallies also helped buoy AUD/USD

• the pair rallied above the 10-DMA, hit 0.6990 then dipped slightly

• AUD/USD sat just above 0.6981 & traded up +0.13% in NY's afternoon

• Rising RSIs, piercing of 10-DMA, bull pennant on monthly chart are bull signals
audusd

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

ANZ Research adopts a neutral bias on GBP/USD in the near-term.

"We expect the GBP/USD to consolidate in the current range. Better US data would support the USD, and one-month risk reversals show more demand for downside GBP/USD protection," ANZ notes.

"The technical picture agrees. GBP/USD broke below 1.3266, the 76.4% retracement of the June-August rally. The next support is 1.3140 (24 June low). Firm resistance is at the 50-dma near 1.3456," ANZ adds.

• a touch higher in early NorAm, +0.55% at 86.3k; Tuesday range 86.4k-85.1k

• Global yields moving lower as French fiscal woes ebb, aids BTC recovery

• Risk broadly better in NorAm, global equities, gold pushing higher

• Bitcoin keeps getting rejected at $87,000 as stocks hover near records

• BTC res 86.4k Tues high, 87.3k daily high Sept 23, 88.8k rising upper 30-d Bolli

• Supt 85.1k Tuesday low, 84.7k the 10-DMA, 82.5k daily low Sept 28
BTC Chart:

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

JP Morgan stays neutral in GBP/USD in the near-term.

"The recovery in EUR crosses since the poor open has continued somewhat but truth be told given the relaxation in the OAT spreads it is a little underwhelming. In a week where there will be little impetus apart from central banker talk it looks like we will remain limited to price action in fixed income (and oil) which is not a great place to be," JPM notes.

"Not much view here on sterling here, net flows have been pretty mixed, the cross is recovering from testing 0.8450/60 support, 0.8500/10 is resistance above. Cable remains pretty dull here in the 1.3145/60 - 1.3280/00," JPM adds.

Bank of America Global Research previews the FOMC minutes from the September meeting, due on Wednesday.

"Sep FOMC minutes should reveal the degree of hawkishness, appetite for further hikes, and views on recent inflation data.

The minutes should provide greater insight into the Fed's decision to raise rates in Sep. While the committee voted unanimously, investors will be looking for clues on whether there is meaningful disagreement over how much additional tightening may be needed," BofA notes.

"Does the FOMC view the move as a midcycle adjustment, or are there broader concerns that could warrant a full-blown hiking cycle? We also expect the minutes to shed more light on how policymakers interpreted the latest inflation data," BofA adds.

• AUD/USD rallied 0.6962-0.6979 overnight, neared the 10-DMA

• Sellers emerged after the 4-session high traded, NY opened near 0.6965

• The pair fell despite USD and US yields moving lower

• Drops in copper, silver also contributed to AUD/USD's move down

• Daily techs now warn that the rally off the October 1 low may be complete

• Daily RSI diverged on the high & a daily inverted hammer candle formed

• AUD/USD bulls likely need above 200-DMA, 0.7040/50 to gain some control
audusd

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

• EUR/USD regains ground above 1.1200 from 16-month lows at 1.1161 on Monday as Oat/Bund spreads narrow

• However, French budget debates are not due until next week so overall recovery could be limited until then

• Relief rally so far extending to 1.1248 where its run in to mild resistance, potential for stops above Friday's high at 1.1261

• However, traders cite 1.1310/30 - where Thursday's breakdown began, as the most likely spot for fresh sales

• FX option prices are retreating from 7-month highs as the spot slide stalls, but shows caution, whilst also warning of 1.1000 risk
EUR/USD daily chart (EBS)

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

• Dollar index struggling to overcome the 200-WMA at 102.15

• Sep's rise from 98.60 halted at 102.28 before drop to 102.05

• The euro is 58% of the dollar index

• Traders are betting euro drops and decline has become stretched

• Dollar index rise is stretched at peak 20-week Bollinger bands

• Another GBP/USD short squeeze is brewing

•
USD index

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