• Bitcoin reached $67,712 on Friday - 38-day high

• BTC has risen back above top of daily Ichimoku cloud

• Bitcoin rose almost $30k following a similar break in February

• Plenty of room to rise with top of 20-day Bollinger bands at $68,904

• The robust will to gamble in fin mkts favours BTC nL1N3HN0CH

• Targets above current $73,803 record high are $74,154, $78,325, $91,826

• Bigger EUR/USD rise likely to fuel bitcoin's rally

• AUD/USD met headwind pre-0.6714 after vaulting 0.6701 (Friday's top) in Asia

• 0.6714 was 4-month high Thursday (before Aussie jobless rate above-forecast)

• AUD supported by higher iron ore prices (big export earner for Australia)

• Minutes from the RBA's May 7 meeting will be published on Tuesday

• AUD fell after RBA kept neutral stance on May 7 - when hawkish hold expected

• CFTC data showed net AUD short up 20% to 77,171 contracts in week to May 14

• Implied volatility gauges FX realised volatility/expectations - its very low

• EUR/USD overnight/next day implied vol 6.0 - break-even just 27 USD pips

• 1-week expiry implied vol eyes March/2024 lows at 4.0 vs 6.5 pre U.S. CPI

• 1-month implied vol 5.45 - vs 2yr low 4.9 late Mar and a 7.1 peak in mid Apr

• Past realised volatility can provide a fair value measure - its heavy too

• 1-week realised is level with implied in mid 4's. 1-month realised just 4.3

• A lack of impending data and big expiries can influence/contain FX near term

For more click on FXBUZ

• EUR/USD last week broke and remained above the daily cloud: bullish

• The daily cloud now spans the 1.0772-1.0800 region

• Scope is growing for much bigger gains to retest the key 1.0934 Fibo

• 1.0934 Fibo is a 61.8% retrace of the 1.1139 to 1.0602 (EBS) drop

• Fourteen-day momentum is positive, reinforcing the overall upside bias

• Only a daily close back under the Ichimoku cloud would be negative

• EUR/USD Trader TGM2334. Previous update nL1N3HK0H1

• Gold leaps to $2449.89/oz record peak - up $76/bbl in 2 sessions

• $2448/oz was next target for this year's rally, $2500 new target

• Speedy ascent suggests demand is far outstripping supply

• Pullback likely after rise over $2425 peak 20-day Bollingers - overbought

• Corrections may be small, toward $2384 - 38.2% Apr-May rise - $173/oz

• Targets at $2553, $2724 and $3000 may be achieved this year

• Our 1.2684 short play in trouble following strong Friday close

• Close clear above the daily cloud and a positive start Monday

• Daily cloud starts to fall away from today, gap to the top opening up

• However, little in the way of strong resistance until 1.2803, Mar. 21 high

• Risk of a full retracement of the 1.2893 -1.2299 drop

• The 76.4% Fibo of that move is at 1.2753

• We will maintain our stop at 1.2730

  For more click on FXBUZ

• +0.05% in a tight 1.0865-1.0876 range, with the U.S. dollar unchanged

• Upbeat sentiment in Asia, with higher regional stocks and commodities

• Copper hit a fresh record high on China demand hopes - adding to inflation

• Charts - momentum studies conflict, 5, 10, and 21-day moving averages climb

• 21-day Bollinger bands rise - uptrend stalled - remains a positive setup

• Targets 1.0898 break, 0.786% March/April fall, then the 1.0980 March high

• Friday's 1.0836 low, then the 1.0815 rising 10 DMA are initial supports

• 1.0850/55 1.682BLN, 1.0875 1.209BLN, 1.0890/00 2.2278BLN strikes for May 20

For more click on FXBUZ

• AUD/USD attempts to stabilise above 0.6700 as risk stays buoyant in Asia

• All 3 major U.S. stock indexes hit records last week, boost sentiment

• Asia shares touch 2-year top on China plans to boost property, buoy AUD

• AUD boosted by rally in metals; LME copper @ 26-mth high, gold at record

• Downside limited as RBA likely to stay higher-for-longer on rates

• RBA minutes of May meeting Tue and Fed speakers key this week

• AUD may consolidate in 0.6640-50 to 0.6730-50 range before further rally

• Resistance 0.6715, 0.6730, support 0.6675-80, 0.6645-50;

• For more click on FXBUZ

• Steady after closing up 0.25% on Friday with the U.S. dollar flat.

• Sterling was resilient last week GBP/USD +1.4%, and EUR/GBP -0.5%

• Asking prices for UK homes hit record high, led by the high-end -Rightmove

• Wednesday's CPI is the key event for BoE expectations and sterling this week

• Charts; daily momentum studies, 5, 10 & 21-day moving averages climb

• 21-day Bollinger bands rise - a strong positive trending setup

• Resistance close at the 1.2709 April high then 1.2766, 0.786% Mar/Apr fall

• A close below 1.2545 21-day moving average low would end the topside bias

  For more click on FXBUZ

• +0.05% after closing unchanged on Friday with the U.S. dollar flat

• Yield spreads tightened, 10yr bund +7bp 2.513%, 10yr UST +5bp 4.420%

• Ukraine braces for 'heavy battles', as Russia continues to advance

• Charts - momentum studies conflict, 5, 10, and 21-day moving averages climb

• 21-day Bollinger bands rise - uptrend stalled, but remains a positive setup

• Targets 1.0898 0.786% of the March/April fall, then the 1.0980 March high

• Europe's 1.0836 low, then the 1.0815 rising 10 DMA are initial supports

• 1.0850/55 1.682BLN, 1.0875 1.209BLN, 1.0890/00 2.2278BLN strikes for May 20

  For more click on FXBUZ

• AUD/USD well supported in Asia after bouncing from 0.6645-50 support on Fri

• Boosted by surging prices for base and precious metals on China optimism

• China unveils 'historic' steps to stabilise crisis-hit property sector

• Copper surges to 26-mth peak, gold +1.5%, silver breaks $30, hits 11-yr high

• AUD may consolidate in 0.6640-50 to 0.6730-50 range before further rally

• Downside limited as RBA likely to stay higher-for-longer on rates

• China LPR rtae fixing Monday and RBA minutes of May meeting Tuesday awaited

• Friday global range 0.6701-0.6649; buying dips preferred

• For more click on FXBUZ

Repeat with no changes

• USD net spec G10 long -$1.03bn in the May 8-14 IMM period; $IDX -0.37%

• Dollar soft after Fed removed hike tones after May 1 Fed meet

• EUR$ +0.59%, specs +12,565 contracts long grows to +17,155

• $JPY +1.19%, specs +8,740 contracts now -126,182; dovish fed stirs yen buys

• GBP$ +0.6%, specs +1,738 contracts now -20,075; dovish Fed tones match BoE

• AUD$ +0.42%, $CAD -0.55%; lower rate expectations boost commod-centric CCYs

• AUD, CAD specs sellers into USD weakness, add to significant shorts

• BTC +2.94% in period, specs +606 contract now short 177 contracts

Adds line regarding April leading econ index

• NY opened just above the 1.0836 session low hit on EBS, choppy action early

• Pair traded heavy overnight on the back of rising US yields US2YT=RR

• Dollar bulls couldn't hold gains in NY however as US$ selling emerged

• Downbeat US April leading econ indexhelped send the dollar downward

• Rallies on gold XAU=, crypto currencies contributed to US$ weakness

• Tighter German-US 2-yr yield spreads US2DE2=RR helped EUR/USD lift

• Pair turned positive, traded 1.08785, was up +0.06% late in the session

• Daily bulls hammer and rising RSIs may be concerns for EUR/USD shorts

• For more click on FXBUZ

Synopsis:

MUFG examines the trend of China's persistent selling of US Treasury bonds, highlighted by the recent release of the US Treasury International Capital data for March, which confirms a continued reduction in China's holdings of US securities.

Key Points:

• March Data Overview: The data shows overall solid buying of US securities, but notable for China’s sale of USD 9.8 billion in US Treasury bonds and USD 5.1 billion in Agency bonds.
• Continued Trend: This marks the fifth consecutive month of Treasury bond sales by China, a trend not directly tied to USD/CNY policy moves but rather indicative of a possible saturation in China’s appetite for US Agency bonds.
• Historical Context: The sustained selling pattern is significant, potentially leading to unprecedented market conditions. Previously, even during the Global Financial Crisis (GFC), such a consistent reduction in both Treasury and Agency bonds was not observed.
• Market Implications: Ongoing sales could signal a strategic shift by China, possibly moving away from US securities altogether, which would demand close market attention given its potential impact.

Conclusion:

The sustained selling of US Treasury bonds by China raises important questions about future investment patterns and market dynamics. While not immediately alarming, another month of such activity could lead to significant market discussions and potential shifts in global financial strategies.

• $CAD drifts lower in NorAm trading, -0.11% at 1.3605; Friday range 1.3644-02

• UST front-end soft, soft US leading index stirs USD selling

• Leading IDX hardly tier 1 data but hints US econ slowing may pull cuts fwd

• Commods higher, oil +0.4%, copper +3% aids commod-centric CAD gain

• Upcoming CA CPI in focus for clues at near-term BoC policy path

• $CAD supt 1.3590 May 15 low, daily cloud base 1.3577, 200-DMA 1.3568

• Res 55-DMa at 1.3622, Friday high 1.3644, falling 10-DMA 1.3661

Synopsis:

Bank of America analysts discuss the trajectory of the USD/JPY exchange rate, emphasizing the potential for the rate to test higher levels again without continuous Japanese yen intervention.

Key Points:

• Recent Price Action: USD/JPY has risen again, currently trading above the previously critical level of 155 but below the intervention thresholds of 158 and 160.
• Market Testing: The market is expected to continue challenging the Bank of Japan's (BoJ) tolerance for a weaker yen, particularly around the 158 to 160 levels.
• Lack of US Cooperation: US Treasury Secretary Yellen's recent remarks do not indicate support for intervention, and the US is seen as unlikely to assist actively in stabilizing the yen.
• Data Dependence: The trajectory of USD/JPY is also tied to US economic indicators. Significant weakening in US data could deter further bullish testing of the yen.

Conclusion:

BofA warns that without ongoing intervention, USD/JPY could potentially retest the 160 level. Market dynamics and upcoming US economic data will be critical in determining the direction of this currency pair.

GBP/USD hovered near flat in Friday trading, capped near Thursday's 1.27 high, as traders cogitate over recent softer U.S. CPI and hot import prices while preparing for key UK inflation data next Wednesday that could decide whether the BoE pivots to a lower policy path in June, presenting a challenge for sterling.

Sterling held most of Wednesday's U.S. CPI-related gains, which had lifted GBP/USD to its 5-week high at 1.27, though traders are wary of testing the April 9-10 peak at 1.2709 after the hot U.S. import price data tempered disinflation euphoria.

Adding to resistance for GBP/USD were this week's dovish comments by MPC member Megan Greene, which added to perceptions of a shift toward softer BoE policy following its recent policy vote.

Inflation data that supports such a shift could send GBP/USD to test minor support at the 100-DMA by 1.2632 and the 55-DMA at 1.2603 on its way down Wednesday's long candle to 1.2585 and perhaps the May 14 low at 1.2510.

For more click on FXBUZ

Synopsis:

Credit Agricole discusses the outlook for the British Pound (GBP) against the US Dollar (USD) with the upcoming week's busy UK economic calendar, which includes May PMIs, April CPI, and retail sales data. Additionally, speeches by key Bank of England (BoE) officials will be closely monitored.

Key Points:

• Economic Data: A packed schedule with May PMIs and key indicators such as April CPI and retail sales, which could provide deeper insights into the UK's economic health.
• BoE Influences: Speeches by BoE Governor Andrew Bailey and other officials like Sarah Breeden and Huw Pill could impact market expectations regarding monetary policy.
• Impact of Data on Monetary Policy: The April CPI data will be particularly scrutinized; a significantly higher-than-expected inflation rate could prompt a reassessment of the BoE's current easing trajectory and influence GBP valuation.

Conclusion:

GBP/USD movements in the coming week will likely hinge on signs of sustained improvement in the UK's economic recovery. A halt in the repricing of BoE rate cuts could bolster the pound, particularly if the economic data exceeds expectations. However, only a substantial deviation in CPI from forecasts is expected to meaningfully alter the current monetary policy outlook and, by extension, affect GBP trading dynamics.

Synopsis:

ANZ assesses the Japanese Yen (JPY) against the US Dollar (USD), emphasizing the impact of a weaker USD and improved global risk sentiment on JPY. Despite domestic economic challenges, there are signs of emerging price pressures in Japan.

Key Points:

• Economic Overview: Japan's Q1 GDP shows a contraction of 0.5% q/q, reflecting ongoing struggles in private consumption and business activity. March saw a 1.2% y/y decline in household spending.
• Price Dynamics: The private consumption deflator increased to 3.7% y/y in Q1, indicating potential re-emergence of service-related price pressures.
• Future Economic Indicators: Upcoming PMI data, especially service sector price gauges, are crucial and may show strengthening price pressures.
• Monetary Policy Context: These data will help gauge the potential for economic recovery in Q2 and the likelihood of the Bank of Japan moving towards normalization of monetary policy.
• Market Positioning: ANZ notes that USD/JPY movements below 152 may be premature, anticipating a more appropriate trading range of 152–157 given the current economic conditions.

Conclusion:

ANZ maintains a cautious but slightly optimistic outlook for the JPY in the near term, influenced by potential marginal weakening in US yields and the USD. The suggested USD/JPY trading range reflects current economic and financial dynamics.

• AUD/USD hit 0.66835 then turned lower, 0.6649 traded, NY opened near 0.6655

• US yield US10YT=RR, US2YT=RR gains drove broad based US$ buying

• USD/CNH rallied to 7.2349 on D3 in early NY to help weigh on AUD/USD

• AUD/USD sank despite rallies in iron-ore DCIOc2 and copper HGv1

• Pair is testing old resistance near 0.6650 which may now be support

• Daily techs lean bearish; RSI falling, price drop follows Thurs. doji

• Fed's Waller, Daly scheduled to speak Friday, may impact risk sentiment

• For more click on FXBUZ

• Bearish close Thursday and weakness in early Europe Friday

• Still set for a fifth straight weekly gain

• Close above the weekly cloud could be significant: top at 1.0801

• Subdued risk appetite lending the USD support

• ECB's Isabel Schnabel calls for caution towards rate cuts beyond June

• Germany's econ grew more than expected in Q1 and inv moral at a 2-year high

• Cooling U.S. inflation and a softer econ raised the prospect of rate cuts

• Option sellers/hedgers help define EUR/USD range by 1.0850 nL1N3HK0J3

  For more click on FXBUZ

• EUR/CHF +0.15%, YTD peak breached, highest since Apr 2023

• Daily close above 0.9848 to provide foundations for further upside momentum

• While a low vol backdrop/sparse macro calendar points to a grind higher

• The path of least resistance remains skewed to the topside

• Support: 0.9800-05 (100-HMA), 0.9783-87 (200-HMA/May 16 low)

• As previously noted, there is a lack of notable resistance until parity

• ECB's Schnabel backs June cut, flags that a July cut is not warranted

For more click on FXBUZ

• EUR/USD on Wednesday broke and remained above the daily cloud: bullish

• The daily cloud now spans the 1.0778-1.0801 region

• Scope is growing for much bigger gains to retest the key 1.0934 Fibo

• 1.0934 Fibo is a 61.8% retrace of the 1.1139 to 1.0602 (EBS) drop

• Fourteen-day momentum is positive, reinforcing the overall upside bias

• Only a daily close back under the cloud would be negative

• FX traders can insure against bigger EUR/USD gains nL1N3HJ0SB

• EUR/USD Trader TGM2334. Previous update nL1N3HJ0I1

• Cable respects 1.2700 resistance level as it consolidates gains from 1.2446

• 1.2700 was 5-week high Thursday. 1.2446 was May 9 low after dovish BoE hold

• 31 of 71 economists polled by Reuters expect first BoE rate cut on June 20

• GBP/USD support points include 1.2645 (Thursday's low), 1.2625 and 1.2600

• 1.2709 (double-day high, April 9/10) and 1.2750 are obstacles beyond 1.2700

• BoE MPC hawk Mann is due to speak at 0800 GMT. Fed remains cautious on cuts