• USD net spec G10 long +$5.95bn to +$51.3bn in Jul 22-28 period, $IDX +0.23%

• EUR$ -0.13%; specs -31.1k contracts now -72.4k; EZ inflation, growth outlook opaque

• $JPY +0.4%; specs -11.3k contracts now -163.4k; BoJ on hold, no intervention lifts USD

• Thursday intervention saw extreme yen reversal; US Trsry warned of more selling

• GBP$ -0.65%; specs -9.3k contracts now -64.8k; dovish Fed, hawkish BoE adds to GBP allure

• $CAD +0.01%; specs -1.9k contracts now -176.3k; CAD short likely pared post-dovish Fed

• AUD$ -0.38%; specs -2.3k contracts now -40k; AUD rising in current period amid widening AU-US spreads

Majors w/IMM Performance Chart:


IMM Position Table as of 7-31:


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

• NY opened near 0.7030 after AUD/USD rallied to 0.7044 in overnight trading

• AUD/USD fell on USD, US yield gains & USD/CNH rally to 6.7550

• Drops in equities, gold, silver added weight; AUD/USD neared the 10-DMA, hit 0.6992

• Buyers emerged as USD selling took hold while stocks, gold, silver moved upward

• USD/CNH pull back from its high and gains for copper helped AUD/USD lift

• AUD/USD rallied and sat above 0.7035 late, it traded up +0.06% in NY's afternoon

• Daily bull hammer, rising RSIs, hold above 10- & 21-DMas are bullish tech signals
audusd


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

CIBC Research previews the US July jobs report due on next Friday.

US hiring is expected to remain modest in July, albeit slightly stronger than in the prior month. The 75K gain expected in payrolls would be broadly consistent with a labour market seeing little hiring but also little firing as well. Having drifted up a little in the prior month, initial jobless claims fell back again in July," CIBC notes.

"The separate household survey is expected to show a rebound in employment following a prior month decline, but potentially an even larger rebound in the size of the labour force due to increased participation. While the national participation rate will drift down over time due to aging demographics, the prior month’s sharp drop in prime aged participation looked suspiciously large and could partially rebound. Higher participation could see the jobless rate tick up slightly to 4.3%," CIBC adds.

• Cable elicits support pre-1.3400 after drop from 1.3432

• 1.3432 was high after dollar weakened on U.S. Treasury news

• U.S. Treasury informed banks that it may intervene in yen, source says

• 1.3400 is a former resistance level turned support point

• New UK finance minister Healey to unveil his first budget on October 28

• BoE's Pill (hawk) sees risk of 'insidious' build-up of inflation pressures

GBPUSD


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

MUFG Research on this week's wave of Japan's MoF intervention.

"The yen surged yesterday with USD/JPY dropping around 5 big figures from 163.00 to 158.00 before then rebounding. The initial move didn’t catch the eye on a day when the US dollar was weakening more generally but it quickly became clear that this was likely action from the MoF. The scale of the intra-day move following this probable action was similar to moves in previous episodes of intervention. The timing is also similar, at month-end, and will fall into the period in which confirmation will not be published until the end of August," MUFG notes.

"The MoF often acts on a second occasion when intervening and hence there will likely be some reluctance in the market to buy USD/JPY now but there is a risk that buyers will soon return given the lack of conviction from the BoJ on the potential necessity for upping the pace of monetary tightening," MUFG adds.

• USD/CHF rises to 0.8122 EBS intra-day high as month-end looms

• 0.80895 was low at 1324 GMT, as dollar weakened on U.S. Treasury news

• U.S. Treasury informed banks that it may intervene in yen, source says

• 0.8056 was EBS European morning low for USD/CHF, as USD/JPY fell sharply

• 0.80395 was EBS two-week low on Thursday, as USD/JPY tanked

• Japan may have sold up to $59 billion in yen-buying FX intervention Thursday

• SNB made a profit of 39.9 billion francs on its currency positions in Q2

• Swiss July inflation data due on Monday, at 0630 GMT; CPI 0.5% YY in June

USDCHF


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

ANZ Research on GBP outlook for the coming week.

"The key question is whether this GBP rally can be sustained next week. The UK calendar is relatively light, with the final PMI releases the only notable domestic data. As a result, GBP/USD is likely to be driven primarily by the USD and any shifts in Fed expectations. From a rates perspective, policy divergence remains limited.

"As such, if next week's US data fail to reinforce the case for further Fed tightening, GBP/USD should be able to maintain its recent gains. Overall, we retain a mildly positive bias on GBP/USD. We see initial resistance at 1.349, with a break above opening the way towards 1.352. Support is seen at 1.333," ANZ adds.

Bank of America Global Research of the this week's wave of MoF's yen intervention.

"We think this attempt could possibly be more effective than previous episodes earlier in the year. 

First, the move comes on the heels of aforementioned USD weakness, which is a notable change from conditions where USDJPY reached fresh highs on broad USD strength. Thus, they are in a place now to blow with- rather than against-the wind.

Second, the yen has clearly lagged the recent appreciation of the KRW (on equity hedging flows). This leaves room for catch-up for similar reasons, should Japan specific policy concerns moderate," BofA notes.

"Third, broader yen sentiment remains subdued, and the market is still positioned short, opening the door for a position-squeeze.

Finally, should the move extend further, we think Japanese exporters could become incentivized to sell USDJPY, should the pair approach the ¥155 level (~¥159 at the time of writing). This could provide fresh downside pressure, or serve to offset potential buying pressure," BofA adds.

• AUD/USD fell to 0.7020 in Asia on USD buying then rallied in Europe's morning

• USD selling drove the pair up to 0.7044, pair hit a fresh 1-1/2-month high

• AUD/USD fell again as USD buying took hold again & yields

rallied

• USD/CNH rally into positive territory, drops in gold and silver added weight on AUD/USD

• AUD/USD dipped below 0.7030 in NY's open, the pair traded near flat

• Daily inverted hammer formed, daily RSI didn't confirm the high, are worries for bulls

• US July University of Michigan survey is a data risk in NY's morning
audusd


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

Given their forward-looking nature and sensitivity to volatility, price action in FX options can offer clues about market expectations — but EUR/USD traders shouldn't get too excited about a pick-up in momentum following this week's spot recovery from 1.1400 to 1.1500+. The FX volatility upon which FX options thrive is unknown, so dealers use implied volatility as a proxy. Implied volatility has been trading at long-term lows across the board - reflecting the lack of FX realised volatility in markets of late, despite the Middle East war and higher oil prices raising inflation concerns. EUR/USD has been no exception, its implied volatility trading at 2026 lows and not far from multi-year lows. USD/JPY intervention spillover lent some mild support to shorter-dated expiries, with 1-month implied volatility briefly back up at 5.2 from 4.85 on Thursday, but it's already back below 5.0 as spot is drawn to a huge 1.1500 expiry.

Risk-reversal options have been trading with a premium for EUR puts over calls since the June Fed decision (downside over upside strikes). The benchmark 1-month expiry 25 delta risk reversals reached new post-April highs at 0.8 ahead of Wednesday's U.S. Fed rate decision as traders hedged the risk of an early hike and subsequent USD gains. That premium has since fallen back to 0.3 as those downside hedges are unwound en masse after the Fed held steady. However, there hasn't been too much interest to cover the risk of an extended USD rise with outright EUR call/USD put options so far.

EUR/USD has been in a 1.1622-1.1325 range since April and the latest price action in FX options isn't giving any cause for concern about those parameters breaking as the traditional summer lull rolls on.
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own; Editing by Kevin Liffey)

• Gold continues to trade with a heavy tone, with rebounds still lacking any real follow-through

• That is notable given the recent recovery in risk assets and the softer USD backdrop

• If gold cannot extend gains even when the broader setup should be supportive, bulls should be wary

• Gold has been stuck in a well-defined $3960-4200 range over the past month, leaving $3960 as pivotal support

• A break below support would open up $3887 initially. Below there, attention would turn to the 100-week MA ($3658)
gold vs usd and spx


Gold daily chart


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

July 31 (Reuters) - USD/JPY's failure to sustain losses through a pivotal technical level will likely complicate Japanese authorities' attempts to hold the exchange rate in check. The Bank of Japan kept interest rates steady on Friday but warned for the first time that underlying inflation could exceed its target, signalling further rate hikes in the wake of the government's yen-buying intervention on Thursday. Despite this, the yen has surrendered some gains brought by intervention.

While the hawkish shift at the BOJ can give yen-buying intervention an extra bite, USD/JPY's failure to close below the Ichimoku daily cloud which currently spans the 158.48-160.67 region on Thursday hints at a potential base.

When a market breaks below a technical level but subsequently reverses, that is usually considered a bear trap and is usually a bullish sign.

More direct intervention is needed to sustain USD/JPY trading below the daily cloud, something that is needed to keep the trajectory of the currency pair on the downside.
Daily Chart


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

• 1.3441 is low water-mark for cable since Thursday's jump to 1.3475

• Jump to 1.3475 was spurred by coordinated FX intervention

• GBP/USD was sub-1.34 before Japan, South Korea reportedly sold dollars

• 1.3475 is the highest level since July 20 (1.3481 was the high that day)

• Traders trimmed hike bets after relatively dovish BoE guidance Thursday

• 1.3368 was post-BoE low Thursday (1.3334-1.3405 was pre-BoE range)

GBPUSD


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

• FX option strikes expire at 10am New York/14:00 GMT on Friday July 31

• EUR/USD: 1.1450 (2.6BLN), 1.1475 (803M), 1.1485-90 (942M), 1.1500 (4.8BLN), 1.1510 (479M), 1.1550-55 (618M)

• USD/CHF: 0.8100 (366M). EUR/CHF: 0.9250 (733M), 0.9350 (856M)

• EUR/GBP: 0.8510-20 (400M), 0.8570-80 (902M)

• GBP/USD: 1.3400 (274M), 1.3470 (312M), 1.3500 (388M)

• AUD/USD: 0.6970-80 (915M), 0.6990-95 (526M), 0.7025 (552M), 0.7050 (256M)

• NZD/USD: 0.5870 (254M), 0.5880 (450M), 0.5890 (234M).

AUD/NZD: 1.1945-50 (518M)

• USD/CAD: 1.4000 (333M), 1.4050 (220M), 1.4100 (3.6BLN), 1.4150-55 (1.1BLN)

• USD/JPY: 159.50 (383M), 160.00 (1.1BLN), 160.50 (234M), 161.15 (330M), 161.50 (1BLN), 162.50 (1.3BLN)

• Thursday's FX options wrap - Fed hold and FX folds - JPY bucks the trend (Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY and all major JPY crosses bounced after falls overnight, on BOJ hold

• USD/JPY 159.40 early Asia to 160.90 EBS, in rally from 157.80 low overnight

• Presumed Japan FX intervention, US rate checks sent it down roughly 5 yen

• But help from a BOJ hike lacking, big bounce on bargain-hunting

• Japanese importer buys seen good, also on Japan stock-buy currency hedges?

• Nikkei up large early on Wall Street surge, maintaining big chunk of gains

• Threat of more FX intervention but impact likely fleeting as after April-May

• USD/JPY has broken break back above 158.47-160.67 daily Ichimoku cloud

• Could rise further if no more intervention later today

• BOJ maintained its hawkish stance and this already discounted

• JGB yields mostly sideways with BOJ on hold

• Option expiries today supportive? 160.00 $1.1 bln, 161.50 $1 bln above

• EUR/JPY 183.93-185.14 EBS, in bounce after 187.43 to 182.11 bounce yesterday

• Back above ascending 200-DMA at 183.66 after sojourn below overnight

• CHF/JPY 197.56 to 199.31 after fall to 196.00 o/n, back to 199.23 200-DMA

• GBP/JPY 214.51 to 216.31 after 212.30 low o/n, above 213.50-96 daily cloud

• AUD/JPY 111.94 to 112.98 after fall to 110.89, to 112.71-113.05 daily cloud

• NZD/JPY 93.43 to 94.41 after fall to 92.72, back above 92.78-93.21 cloud

• Related , , on BOJ ,

• On Japan economic data , for more click on [FXBUZ]

USD/JPY hourly:


Yield on JGB 10s:


Nikkei 225:

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

• EUR/USD backs off from 1.1537 EBS high overnight, Asia 1.1531 to 1.1507

• All eyes seem to be on JPY which continues to lead USD-major currency moves

• Holding in 1.1488-1.1587 daily Ichimoku cloud, 100-DMA 1.1568 in cloud

• Hourly tenkan 1.1523 above, hourly kijun below at 1.1485

• Nearby option expiries today 1.1500 E4.8 bln, 1.1505-55 total E1.7 bln

• Below 1.1400-90 total E10.1 bln, likely to limit moves to the downside

• EUR/JPY 183.93-185.14 EBS, in bounce after 187.43 to 182.11 bounce yesterday

• In flux and moves from here to depend on USD/JPY lead

• Spot back above ascending 200-DMA at 183.66 after sojourn below overnight

• EUR/GBP 0.8556-60 after fall from 0.8586 high yesterday, heavy

• Holding above daily Ichimoku kijun at 0.8553 however, tenkan 0.8539 below

• Back in ascending hourly Ichimoku cloud between 0.8554-63, 100-HMA 0.8556

• Option expiries today include 0.8510-20 total E400 mln, 0.8570-80 E903 mln

• EUR/CHF 0.9284-90 EBS after 0.9349 to 0.9272 fall yesterday

• Above 0.9263 flat daily Ichimoku kijun but below ascending 200-HMA at 0.9293

• Option expiries today 0.9100 E472 mln, 0.9250 E733 mln, 0.9350 E856 mln

• Related comments , , ,

• And , , , also
EUR/USD:


EUR/USD nearby option expiries into next week:


EUR/JPY:

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

• AUD/USD -0.1% Fri, trading subdued in wake of Thur's FX intervention

• USD/JPY now +1.7% from Thur 157.80 low, further action may yet be required

• CN Jul NBS manufacturing PMI slips to 49.2 (Reuters poll consensus 50.0)

• AU Q2 producer price index (PPI) +1.3% q/q, +3.6% y/y

• U.S. Q2 employment costs data due Fri, Reuters poll consensus +0.8% q/q

• AUD struggling clear 0.7025-35 resistance zone, overnight rally at risk

• Range Asia 0.7023-32 support 0.6920 0.6866, resistance 0.70885 0.7200
AUD Daily 55-DMA


JPY Hourly Bollinger Study & DXY Daily 55-DMA

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

• USD/THB opens lower, tracks broad USD sell-off on JPY intervention

• Pair traded 33.34-58 range in NY, closed at 33.41

• Supports at 33.30, 33.20, resistance at 33.50, 33.70

• Bounce in USD/JPY off lows and oil prices underpin

• Brent last +0.74% to $89.69/bbl

• DXY last at 100.15, ranged 100.04-15 so far
THB

(Catherine Tan is a Reuters market analyst. The views expressed are her own.)

• USD/CNH hit a 40-mth low of 6.7441 late Thurs, cued by USD/JPY

• Broke June low and interim base 6.7500, ended at 6.7480

• Next target for shorts is 6.7355, the 61.8% Fibo of 2022-2025 rally

• Yen surge to 157.80 from 163.40 boosts AXJ currencies substantially

• Aggressive intervention by Japan to strengthen yen

• S. Korea authorities also intervened to boost the KRW
CNH


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• NZD/USD +1.5% from Thur 0.57915 low as DXY extended post-FOMC losses

• NZD break above 0.5873 opens door on topside extension toward 0.5990

• Thur's likely JPY intervention pushed broader USD index down 0.8% to 100.0

• NZ business confidence swung positive in Jul according to monthly ANZ survey

• U.S. Jun core PCE +0.1% m/m, +3.3% y/y (poll 0.2% & +3.3% respectively)

• Range NZ 0.5877-82, support 0.5627 5580, resistance 0.5990-95 0.60925
JPY Daily 55-DMA


DXY Daily 55-DMA


NZD Daily 55-DMA

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

• AUD/USD +1.2% from Thur 0.69465 low with heavy USD/JPY selling dominant

• Suspected intervention saw JPY -2.4% Thur, driving DXY down 0.8% to 100.0

• AU Q2 PPI due 0130 GMT Fri, alongside Jun private sector & housing credit

• U.S. Jun core PCE +0.1% m/m, +3.3% y/y (poll 0.2% & +3.3% respectively)

• AUD near upper hourly Bollinger band, may limit extension of overnight move

• Range overnight 0.69505-0.7033 support 0.6920 0.6866, resistance 0.70885
AUD Hourly Bollinger Study & DXY Daily 55-DMA


JPY Daily 55-DMA

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

MUFG Research reviews today's July BoE decision.

"The BoE left rates unchanged at 3.75%, as expected. The 6-3 vote split was tighter than anticipated with Mann joining the dissenters in pushing for a hike. That hawkish shift was more than diluted by messaging highlighting the strength of domestic disinflation. Across the MPC we see some daylight between the 3 dissenters and the rest and remain comfortable with our call for an extended hold," MUFG notes.

"The bar for a September hike looks a bit higher after today. Further ahead, we believe that second-round effects will ultimately remain contained given the soft macro backdrop. But the BoE will continue to watch for broader pass-through in the survey data, while the argument for pre-emptive tightening will strengthen with each new escalation in the Middle East," MUFG adds.

(Fixes typo in headline)

• GBP$ surged higher in NorAm trading; +0.77% at 1.3470; NY range 1.3474-1.3334

• BoE held rate as exp'd; vote 6-3 was slightly more hawkish than expected

• BoE holding line awaiting inflation data in light of recent oil volatility; Bailey says can wait & see

• Pair also benefiting from significant USDJPY selling on suspected intervention

• GBP$ res 1.3460/74 23.6% Fib of 1.3140-1.3556/Thurs high, 1.3517 upper 30-d Bolli

• Supt 1.3399 flat 200-DMA, 1.3368 falling 10-DMA, 1.3334 Thursday low (Europe)

• Note long tail Thursday, support near 1.3275 last 3-sessions hint at growing support

GBP$ Chart:


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

• NY opened near 1.1470 after 1.1435 traded overnight, choppy action ensued early

• Buyers emerged however as USD was sold broadly & US yields

sank

• Solid gains in gold, silver & equities rallies reinforced the USD selling theme

• USD/CNH drop to a 3-1/2-year low also contributed to keeping the USD heavy

• EUR/UD rallied above the 55-DMA, hit a 1-1/2-month high of 1.1537

• The pair sat just below that high late in the day, it traded up +0.54%

• Techs lean bullish; RSIs are rising, the pair trades above the 10-, 21- & 55-DMAs

• July's monthly bull hammer, break of down trend off May 11 high add to bull signals
eurusd


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