Category: EUR

  • Euro Bids Higher as ECB Easing Path Slows – Friday, 8 May

    Where we are: EUR/USD is currently trading at 1.1777, up 0.45% on the day and testing the upper end of its intraday range of 1.1723-1.1778. The Fiber has caught a bid throughout the European morning, extending gains from the Asian session and challenging levels last seen in late April. This current level marks a significant breach of recent resistance, potentially paving the way for further upside.

    What’s driving it: The Euro is catching a bid as expectations for aggressive ECB easing have been tempered. While the ECB cut rates in April, retaining a mild easing bias, sticky services inflation near 3% and wage data will keep the doves on a short leash. Recent communications from ECB officials, including Lagarde’s comments on stablecoins and Schnabel’s discussion of central bank independence, signal a cautious approach to further easing. The Euro is being additionally supported by broader risk-on sentiment, reflected in the rally in US equity futures, and a weaker DXY trading at 97.77.

    • ECB Deposit Facility Rate at 2.50% after a 25bp cut on April 17th.
    • DE 2Y yields are down 2bp d/d to 2.578%, suggesting a slight easing of monetary policy expectations but not enough to trigger a sell-off.
    • CFTC data shows net non-commercial Euro positioning modestly long at +35,712 contracts, leaving scope for further upside on short covering.

    NY session focus: All eyes are on the 08:30 ET US jobs report (Average Hourly Earnings, Non-Farm Employment Change, and Unemployment Rate). A weaker-than-expected print could fuel further Dollar weakness and propel EUR/USD towards 1.1800, while a strong report could trigger a reversal. The 10:00 ET Prelim UoM Consumer Sentiment and Inflation Expectations will also be closely watched for further clues on the Fed’s policy path. Watch for the ECB President Lagarde speaking at 09:00 CET as well. The trade that’s working is long EUR/USD. The trade that’s at risk is short EUR/GBP given the broader risk-on mood. The pain trade is a strong US jobs report sending EUR/USD back below 1.1700, squeezing Euro longs.

  • NY Session Tactical Brief – Thursday, 7 May

    Regime: Mixed, with VIX holding steady at 17.38 and US yields slightly lower, suggesting a cautious risk-on sentiment tempered by geopolitical tensions.

    Today’s market themes:

    • Mideast Peace Potential: Easing oil supply concerns dominate, pressuring crude and boosting risk assets.
    • Dollar Weakness: DXY continues its descent, supporting EUR, GBP, AUD, and gold.
    • Earnings Rotation: Focus shifts to industrial and financial earnings in the US after tech-led rally.

    The setup: Markets are pricing in a higher probability of a Middle East peace deal, driving WTI down nearly 6% to $90.21. This is providing a tailwind for risk assets, especially equities. However, crowded positioning in USD and Aussie could trigger a squeeze on any hawkish surprises. Watch US Unemployment Claims at 08:30 ET.

    Watch list (native time per event):

    • 08:30 ET USD: Unemployment Claims (forecast 205K, prior 189K)
    • 10:00 ET USD: Factory Orders (prior 0.8%)
    • 14:00 BST GBP: BoE’s Breeden speaks on Inflation

    Bias by asset:

    • DXY:
      • Direction: Down
      • Domestic (US): Fed likely to remain cautious; watch claims data.
      • Cross: Risk-on sentiment weighing; EUR and GBP strength.
      • Levels: Resistance at 97.90, support at 97.65.
    • EUR/USD:
      • Direction: Up
      • Domestic (EU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness, positive risk sentiment, US-DE 10Y widening.
      • Levels: Support at 1.1740, resistance at 1.1800.
    • GBP/USD (Cable):
      • Direction: Up
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness, boosted by positive risk sentiment.
      • Levels: Support at 1.3590, resistance at 1.3650.
    • USD/JPY:
      • Direction: Neutral
      • Domestic (JP): No fresh domestic catalyst — sensitive to US response.
      • Cross: US 10Y stable, risk-on environment, intervention risk high.
      • Levels: Support at 156.00, resistance at 156.50.
    • USD/CAD (Loonie):
      • Direction: Down
      • Domestic (CA): No fresh domestic catalyst — sensitive to US response.
      • Cross: WTI weakness, DXY direction, US-CA 10Y spread.
      • Levels: Support at 1.3620, resistance at 1.3650.
    • AUD/USD (Aussie):
      • Direction: Up
      • Domestic (AU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness, China growth optimism.
      • Levels: Support at 0.7230, resistance at 0.7270.
    • NZD/USD (Kiwi):
      • Direction: Up
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness, positive risk sentiment.
      • Levels: Support at 0.5950, resistance at 0.5990.
    • USD/CHF (Swissy):
      • Direction: Down
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness, safe-haven outflows into risk-on.
      • Levels: Support at 0.7770, resistance at 0.7800.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP neutral, EUR/JPY up, GBP/JPY up
      • Domestic: Relative hawkishness of BoE priced in; BoJ dovish.
      • Cross: Risk-on favoring JPY crosses; DXY impact on EUR/GBP.
      • Levels: Monitor ranges, relative yield direction key.
    • XAU (Gold):
      • Direction: Up
      • Domestic (asset-specific): Rising as breakevens rise; CB demand supportive.
      • Cross: DXY weakness, safe haven demand diminishing.
      • Levels: Support at 4700, resistance at 4765.
    • XAG (Silver):
      • Direction: Up
      • Domestic (asset-specific): Industrial demand supportive.
      • Cross: DXY weakness, positive risk sentiment.
      • Levels: Support at 8000, resistance at 8250.
    • WTI / Brent:
      • Direction: Down
      • Domestic (asset-specific): Peace deal/higher supply.
      • Cross: DXY strength would add to move lower; risk aversion would add to move lower.
      • Levels: Support at 90.00, resistance at 96.00.
    • Copper:
      • Direction: Up
      • Domestic (asset-specific): China rebound expectations/LME-stock
      • Cross: Global growth proxy; Dollar strength a headwind
      • Levels: Support at 615, resistance at 625
    • SPX:
      • Direction: Up
      • Domestic (US): Earnings momentum; rates stabilize.
      • Cross: Positive global tone, VIX suppression.
      • Levels: Futures support at 7380, resistance at 7410, cash support 7300.
    • NDX:
      • Direction: Up
      • Domestic (US): Mega-cap tech earnings supportive/ AI narrative.
      • Cross: Lower rates sensitivity, high beta.
      • Levels: Resistance at 28800, support 28600.
    • US30 (Dow):
      • Direction: Up
      • Domestic (US): Rebound in industrial earnings; cyclical shift.
      • Cross: Responding positively to bond-yield relief.
      • Levels: Resistance near 50200, support at 49900.
    • UK100 (FTSE):
      • Direction: Up
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: Global risk, benefiting from oil decline.
      • Levels: Support at 22800, resistance at 23000.
    • DAX:
      • Direction: Neutral
      • Domestic (DE): Bund yields stable; weak economic data.
      • Cross: Watching US tech strength; risk-on sentiment.
      • Levels: Support at 24850, resistance at 25000.
    • Nikkei:
      • Direction: Up
      • Domestic (JP): JPY weakness driving earnings.
      • Cross: Catching up with US tech performance; risk-on buying.
      • Levels: Support at 62000, resistance at 63000.
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): ETF flow-dependent, funding elevated.
      • Cross: risk-regime, positive overall, high correlation to tech.
      • Levels: Support at 80500, resistance at 81700.

    Positioning watch: CFTC data shows crowded longs in AUD, Copper, and Bitcoin (>90th percentile) and crowded shorts in JPY, GBP, and Nasdaq (

    The pain trade: A hawkish surprise from the US Unemployment Claims, triggering a USD rally and sending risk assets lower, would hurt the most positions.

  • Euro Surges on Weaker Dollar, ECB Policy in Focus – Thursday, 7 May

    Where we are: EUR/USD is currently trading at 1.1775, up 0.21% on the session, breaching the overnight high of 1.1778. The pair has been consolidating gains made earlier in European trading, with the overnight range contained between 1.1745 and the current level. This price action marks a continuation of the bullish momentum seen yesterday, and sits comfortably above the prior NY close.

    What’s driving it: The euro is catching a bid, primarily driven by a softer dollar, as US yields drift lower and risk sentiment remains positive. Domestically, the market continues to digest the ECB’s recent 25bp rate cut to 2.50% at their April 17th meeting, with a mild easing bias maintained. Dovish expectations are being fueled by softening wage trackers and services HICP near 3%, which are solidifying the doves’ base case for a follow-up cut. The German 2-year Schatz yield is down 3bp on the day at 2.519%, while the 10-year Bund is down 2bp to 2.959%, indicating a flattening bias in the German curve.

    • ECB’s de Guindos this morning highlighted the importance of deepening financial integration to support Europe’s prosperity.
    • Money markets are pricing in approximately 50bps of ECB rate cuts by year-end, with a 75% chance of the first move in June.
    • Speculative positioning remains modestly long EUR, with net non-commercial contracts at +35,712 (10th percentile), suggesting squeeze potential remains limited.

    NY session focus: The main event for the NY session will be the 08:30 ET release of US Unemployment Claims, with a forecast of 205K versus a previous 189K. A significant miss to the upside could further pressure the dollar and lift EUR/USD towards 1.1800, while a beat could see a retest of the 1.1745 level. The US 10-year yield currently trades at 4.316%, down nearly 3bp on the session, and further downside would likely fuel the EUR/USD rally. The pain trade would be a surprise hawkish signal out of Europe, or a strong US jobs number that puts the Fed back in focus.

  • NY Session Tactical Brief – Wednesday, 6 May

    Regime: Risk-on, fuelled by falling US yields and hopes of de-escalation in the Middle East; VIX is elevated but failing to hold gains.

    Today’s market themes:

    • Geopolitical relief rally: Equities and gold gain on reports of a potential US-Iran deal, sending oil sharply lower.
    • Dovish ECB spillovers: European yields are sharply lower after ECB commentary and stable wage data, supporting European equities.
    • Crowded short squeeze: Risk assets supported by potential short squeeze with CFTC data showing traders are heavily short JPY and Nasdaq.

    The setup: Oil’s sharp decline is the key driver today, prompting a rotation into risk assets, and supporting gold. The trade is to fade the rally in gold as real yields remain positive. Key risk is a breakdown in the US-Iran deal, which would send oil prices sharply higher again and reverse the risk-on tone.

    Watch list (native time per event):

    • 08:15 ET USD: ADP Non-Farm Employment Change (118K vs 62K)
    • 10:00 ET CAD: Ivey PMI (49.9 vs 49.7)
    • 16:15 ET CAD: BOC Gov Macklem Speaks

    Bias by asset:

    • DXY:
      • Direction: Down
      • Domestic (US): US data will be crucial in determining the next direction.
      • Cross: Risk sentiment and falling US yields are weighing.
      • Levels: Support at 97.50, resistance at 98.00.
    • EUR/USD:
      • Direction: Up
      • Domestic (EU): Lower Bund yields are supporting as ECB turns dovish.
      • Cross: Weaker DXY and positive risk sentiment are supportive.
      • Levels: Support at 1.1700, resistance at 1.1800.
    • GBP/USD (Cable):
      • Direction: Up
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness and risk appetite are key drivers.
      • Levels: Support at 1.3550, resistance at 1.3650.
    • USD/JPY:
      • Direction: Down
      • Domestic (JP): Intervention risk remains, limiting JPY weakness.
      • Cross: Falling US 10Y yields and a weaker DXY are pressuring.
      • Levels: Support at 155.00, resistance at 157.00.
    • USD/CAD (Loonie):
      • Direction: Neutral
      • Domestic (CA): BoC speakers watch to see if rate cuts are coming.
      • Cross: USD weakness offset by lower WTI, US-CA 10Y stable.
      • Levels: Support at 1.3580, resistance at 1.3650.
    • AUD/USD (Aussie):
      • Direction: Up
      • Domestic (AU): No fresh domestic catalyst — sensitive to US response.
      • Cross: Copper price rise and DXY weakness, China growth hopes aiding.
      • Levels: Support at 0.7200, resistance at 0.7280.
    • NZD/USD (Kiwi):
      • Direction: Up
      • Domestic (NZ): RBNZ speakers in focus, impact on kiwi to be assessed.
      • Cross: DXY weakness and risk-on, limited by US yield impact.
      • Levels: Support at 0.5900, resistance at 0.6000.
    • USD/CHF (Swissy):
      • Direction: Down
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness and haven demand waning.
      • Levels: Support at 0.7770, resistance at 0.7830.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Mixed
      • Domestic: Relative CB divergence is a driver today.
      • Cross: EUR/GBP ranges. JPY shorts are exposed.
      • Levels: Monitor key levels from overnight session.
    • XAU (Gold):
      • Direction: Up
      • Domestic (asset-specific): Hopes for de-escalation are driving.
      • Cross: Weaker DXY, fading risk-off, positive momentum.
      • Levels: Support at 4650, resistance at 4700.
    • XAG (Silver):
      • Direction: Up
      • Domestic (asset-specific): No fresh domestic catalyst — sensitive to US response.
      • Cross: Follows Gold’s trend, industrial demand boost.
      • Levels: Support at 7600, resistance at 7800.
    • WTI / Brent:
      • Direction: Down
      • Domestic (asset-specific): Deal chatter is main driver.
      • Cross: Weaker DXY isn’t sufficient to lift with Iran headlines.
      • Levels: Support at 90, resistance at 100.
    • Copper:
      • Direction: Up
      • Domestic (asset-specific): No fresh domestic catalyst — sensitive to US response.
      • Cross: Aided by optimism.
      • Levels: Support at 610, resistance at 620.
    • SPX:
      • Direction: Up
      • Domestic (US): Boosted sentiment supports outlook.
      • Cross: VIX regime shift, global risk-on fueling.
      • Levels: Futures 7300, cash support at 7250, resistance at 7350.
    • NDX:
      • Direction: Up
      • Domestic (US): Mega-cap resilience and lower rates helpful.
      • Cross: Rate sensitivity supporting.
      • Levels: Monitor intraday resistance and support levels.
    • US30 (Dow):
      • Direction: Up
      • Domestic (US): Broader market lift aids cyclicals.
      • Cross: Lower yields benefit outlook.
      • Levels: Monitor intraday resistance and support levels.
    • UK100 (FTSE):
      • Direction: Up
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: Riding the positive global wave, GBP drag offset.
      • Levels: Monitor intraday resistance and support levels.
    • DAX:
      • Direction: Up
      • Domestic (DE): Lower Bund yields, EU tone aiding DAX.
      • Cross: Taking cues from US tech.
      • Levels: Monitor intraday resistance and support levels.
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY weakness and earnings are important.
      • Cross: Risk tone and US tech performance play a key role.
      • Levels: Monitor intraday resistance and support levels.
    • BTC:
      • Direction: Up
      • Domestic (asset-specific): ETF flow stable, and funding rate stable.
      • Cross: Risk sentiment.
      • Levels: Support at 81000, resistance at 83000.

    Positioning watch: JPY is the most crowded short (0th percentile) and Aussie is most crowded long (96th percentile), per CFTC. A dovish surprise from the Fed or a hawkish BoJ shift could trigger a significant squeeze in JPY.

    The pain trade: A surprisingly strong ADP print would reignite inflation concerns and send yields higher, triggering a sharp reversal of today’s risk-on move and hurting gold longs.

  • Euro Bids Higher on ECB Dovish Tilt – Wednesday, 6 May

    Where we are: EUR/USD currently trades at 1.1756, up +0.53% on the day. The pair has traded in a range of 1.1692-1.1797 so far, pushing towards the upper end of the range. This price action suggests a continuation of the bid seen in the EU session, and marks a substantial move above yesterday’s NY close.

    What’s driving it: The Euro is gaining ground as the market continues to digest the ECB’s mild easing bias. This dovish outlook, reinforced by Piero Cipollone’s comments on the economic implications of the new energy shock, and the latest ECB wage tracker indicating stable negotiated wage pressures, are weighing on the single currency. German yields are lower across the curve, with the 2-year Schatz down 8bp to 2.566% and the 10-year Bund down 4bp to 2.996%, further eroding the Euro’s appeal. A weaker dollar, as reflected in the DXY at 97.79 (-0.41%), is providing additional tailwind.

    • ECB’s Cipollone’s comments on the energy shock are tilting the balance toward further easing.
    • The latest ECB wage tracker is offering doves further ammo ahead of the June meeting.
    • CFTC data shows a net non-commercial Euro position at +35,712 contracts, in the 10th percentile, indicating potential for a short squeeze if the narrative shifts bullishly.

    NY session focus: The market will be watching the 08:15 ET release of the ADP Non-Farm Employment Change. A stronger-than-expected print could temper the Euro’s advance, while a weaker number would likely fuel further gains. Key levels to watch are 1.1800 as immediate resistance and 1.1700 as initial support. The current trade is long EUR/USD, riding the ECB dovish narrative and USD weakness. The risk is a hawkish surprise from the Fed or a re-acceleration in Eurozone services inflation. The pain trade would be a return of USD strength, triggered by strong US data, sending EUR/USD back below 1.1650.

  • NY Session Tactical Brief – Tuesday, 5 May

    Regime: Risk-on, as S&P 500 futures test overnight highs and the VIX remains subdued below 17 despite geopolitical headlines and upcoming data.

    Today’s market themes:

    • RBA Rate Hike: Market anticipating an aggressive RBA hike, driving AUD strength and potential impact across Asia-Pac FX.
    • ISM Services & JOLTS: US economic data to set the tone for the NY session and further solidify Fed policy expectations.
    • Middle East Tensions: Geopolitical risks simmer, with eyes on oil supply disruptions and associated impact on risk sentiment.

    The setup: Focus remains on the RBA rate decision, with expectations leaning towards a 25bp hike to 4.35%. A larger hike or hawkish statement could further boost AUD, while a dovish surprise could lead to a sharp reversal. S&P 500 futures at 7261.75 need to hold to confirm risk-on, failure here triggers sell pressure. Watch US 10Y near 4.42% as a key sentiment indicator.

    Watch list (native time per event):

    • 14:30 AEST AUD: Cash Rate (forecast 4.35%, prior 4.10%)
    • 10:00 ET USD: ISM Services PMI (forecast 53.7, prior 54.0)
    • 10:45 NZT NZD: Employment Change q/q (forecast 0.3%, prior 0.5%)

    Bias by asset:

    • DXY:
      • Direction: Neutral to slightly bullish.
      • Domestic (US): Fed’s data dependence / US data strength / US yields.
      • Cross: Global growth concerns / risk aversion / EUR weakness.
      • Levels: Support 97.80, Resistance 98.50.
    • EUR/USD:
      • Direction: Neutral to bearish.
      • Domestic (EU): ECB policy divergence / moderate Eurozone HICP/ peripheral spreads
      • Cross: DXY strength / US-DE 10Y widening / risk-off flows.
      • Levels: Support 1.1670, Resistance 1.1700.
    • GBP/USD (Cable):
      • Direction: Neutral.
      • Domestic (UK): BoE’s caution / UK CPI near target / Gilt yields steady.
      • Cross: DXY influence / US-UK 10Y / risk appetite.
      • Levels: Support 1.3500, Resistance 1.3575.
    • USD/JPY:
      • Direction: Bullish.
      • Domestic (JP): BoJ ultra-dovish stance / JGB yields capped / verbal intervention risk.
      • Cross: US 10Y strength / DXY strength / risk-on sentiment.
      • Levels: Support 157.00, Resistance 158.00.
    • USD/CAD (Loonie):
      • Direction: Neutral.
      • Domestic (CA): BoC holding steady / CPI near target / WTI price action.
      • Cross: DXY strength / US-CA 10Y spread.
      • Levels: Support 1.3600, Resistance 1.3650.
    • AUD/USD (Aussie):
      • Direction: Bullish (pre-RBA), then volatile.
      • Domestic (AU): RBA decision / Inflation dynamics / Australia-China relations.
      • Cross: DXY impact / US-AU 10Y / risk.
      • Levels: Support 0.7150, Resistance 0.7200.
    • NZD/USD (Kiwi):
      • Direction: Neutral to bearish.
      • Domestic (NZ): Employment data / RBNZ caution / New Zealand-China trade.
      • Cross: DXY / US-NZ 10Y / risk aversion.
      • Levels: Support 0.5850, Resistance 0.5900.
    • USD/CHF (Swissy):
      • Direction: Neutral.
      • Domestic (CH): SNB policy / Swiss inflation / economic outlook.
      • Cross: DXY direction / safe-haven flows / Europe.
      • Levels: Support 0.7800, Resistance 0.7850.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Depends on relative CB stance + yields.
      • Domestic: Relative monetary policies and yield differentials are dominant.
      • Cross: DXY / risk sentiment / potential cross-currency feedback loops.
      • Levels: Monitor key technical levels for each cross.
    • XAU (Gold):
      • Direction: Bullish.
      • Domestic (asset-specific): Real yields falling / breakeven inflation firming / CB demand.
      • Cross: DXY weakness / risk-off sentiment.
      • Levels: Support 4520, Resistance 4585.
    • XAG (Silver):
      • Direction: Bullish.
      • Domestic (asset-specific): Strong industrial demand / inflation hedge narrative.
      • Cross: DXY weakness / risk appetite.
      • Levels: Support 7280, Resistance 7450.
    • WTI / Brent:
      • Direction: Neutral.
      • Domestic (asset-specific): EIA stock data / OPEC supply policy / refining activity.
      • Cross: DXY direction / geopolitical risk premium.
      • Levels: WTI support 102.50, resistance 105.50.
    • Copper:
      • Direction: Bullish.
      • Domestic (asset-specific): China stimulus / LME inventory depletion / supply disruption.
      • Cross: Global growth proxy / DXY.
      • Levels: Support 585, Resistance 600.
    • SPX:
      • Direction: Neutral to bullish.
      • Domestic (US): Earnings season / Fed policy / US economic data.
      • Cross: VIX regime / global macro backdrop / US 10Y.
      • Levels: Futures support 7220, resistance 7270; cash S&P support 7170 and 7240.
    • NDX:
      • Direction: Bullish.
      • Domestic (US): Mega-cap tech performance / AI enthusiasm / rising rates-priced-in.
      • Cross: Rate sensitivity / VIX level.
      • Levels: Support at 27730, Resistance at 28000.
    • US30 (Dow):
      • Direction: Neutral.
      • Domestic (US): industrial sector earnings / cyclical names / banks.
      • Cross: Bond-yield impact / recession fears.
      • Levels: Support 49050, Resistance 49300.
    • UK100 (FTSE):
      • Direction: Neutral.
      • Domestic (UK): Sterling strength / Commodity prices (energy).
      • Cross: Global Risk Appetite.
      • Levels: Support 22420, Resistance 22600.
    • DAX:
      • Direction: Bullish.
      • Domestic (DE): Eurozone recovery / German data / Bund yields.
      • Cross: US Tech Momentum / DXY / Risk appetite.
      • Levels: Support 23990, Resistance 24400.
    • Nikkei:
      • Direction: Neutral.
      • Domestic (JP): JPY weakness benefit / earnings performance.
      • Cross: US tech sentiment / risk appetite.
      • Levels: Support 59250, Resistance 59700.
    • BTC:
      • Direction: Neutral to bullish.
      • Domestic (asset-specific): ETF flows / on-chain activity / regulations.
      • Cross: DXY influence / risk sentiment / Nasdaq correlation.
      • Levels: Support 79750, Resistance 81300.

    Positioning watch: The Yen and Nasdaq remain crowded shorts (squeeze on positive surprise), while AUD, Copper, and Bitcoin are crowded longs (squeeze on disappointment). CFTC data shows extreme positioning, making these assets vulnerable to outsized moves on data releases.

    The pain trade: A hawkish surprise from the RBA, combined with a soft US ISM, would trigger a sharp AUD rally while simultaneously pressuring USD shorts, creating a significant “double squeeze” scenario.

  • Euro on Shaky Ground Despite ECB’s Easing Bias – Tuesday, 5 May

    Where we are: EUR/USD currently trades at 1.1691, barely changed on the day (+0.01%), trapped within a tight intraday range of 1.1677-1.1698. This level is a whisker above yesterday’s NY close. The pair is struggling to gain traction, weighed down by a strengthening dollar.

    What’s driving it: The Euro’s outlook is clouded by the ECB’s mild easing bias, cemented by last month’s 25bp rate cut. While the prospect of further cuts remains data-dependent, with wage trackers and services HICP under scrutiny, the bar appears low given the 2.5% deposit facility rate. Dollar strength, fuelled by a jump in the DXY to 98.26, is exacerbating the Euro’s woes, alongside a widening US-DE 10Y yield spread of +134bp. The collapse of the Romanian government adds a layer of political uncertainty within the Eurozone, potentially jeopardizing access to EU funds.

    • ECB retained a mild easing bias at its last meeting on April 17th, keeping a meeting-by-meeting approach.
    • Romanian government collapse adds to EU political instability.
    • Speculator positioning shows a modestly long EUR bias (+35,712 contracts), albeit at the 10th percentile, suggesting little room for further upside without a catalyst.

    NY session focus: The US ISM Services PMI and JOLTS Job Openings data at 10:00 ET will be crucial in determining the near-term direction of EUR/USD. A strong ISM print could further fuel dollar strength, targeting a break below 1.1675, while weak data may offer a temporary reprieve. Keep an eye on ECB President Lagarde’s speech at 14:30 CET for any hints about the future policy path. The trade at risk is short EUR/USD given the crowded DXY long. The pain trade would be a sharp reversal in US yields, squeezing dollar longs and lifting the Euro.

  • NY Session Tactical Brief – Monday, 4 May

    Regime: Risk-off, with escalating Middle East tensions driving haven demand and weighing on equities; VIX at 16.89.

    Today’s market themes:

    • Geopolitical risk: Oil spike and risk-off sentiment due to heightened tensions in the Strait of Hormuz.
    • USD strength: Continued consolidation after recent gains, influenced by yield differentials and risk aversion.
    • ECB policy divergence: ECB hints at rate hikes clash with dovish undertones from BoJ and others.

    The setup: The spike in oil prices driven by Mideast tensions is fueling inflation fears and pressuring risk assets. Traders are pricing in a potential hawkish response from central banks, particularly the ECB, exacerbating the downside pressure on equities. Watch for further escalation in the Middle East, with a risk of a deeper equity sell-off if oil breaches $105 and 10Y yields rise further.

    Watch list (native time per event):

    • 15:30 ET CAD: BOC Gov Macklem Speaks

    Bias by asset:

    • DXY:
      • Direction: Neutral to bullish
      • Domestic (US): Fed on hold / Yield consolidation
      • Cross: Safe-haven flows / Global risk aversion
      • Levels: Support 118.50 / Resistance 119.00
    • EUR/USD:
      • Direction: Bearish
      • Domestic (EU): ECB rate hike expectation / slow growth
      • Cross: DXY strength / Risk-off flows
      • Levels: 1.1650 / 1.1750
    • GBP/USD (Cable):
      • Direction: Neutral to bearish
      • Domestic (UK): BoE cautious / Data dependent
      • Cross: DXY strength / risk aversion
      • Levels: 1.3550 / 1.3650
    • USD/JPY:
      • Direction: Bullish, but with intervention risk
      • Domestic (JP): BoJ dovish / Yield curve control
      • Cross: US 10Y strength / Risk-off buying USD
      • Levels: 157.00 / 158.00
    • USD/CAD (Loonie):
      • Direction: Bullish
      • Domestic (CA): BoC cautious / WTI boost limited
      • Cross: DXY strength / US growth advantage
      • Levels: 1.3650 / 1.3700
    • AUD/USD (Aussie):
      • Direction: Bearish
      • Domestic (AU): RBA dovish / Rate cut odds rise
      • Cross: DXY strength / China weakness / Risk-off
      • Levels: 0.7150 / 0.7250
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ dovish stance continues
      • Cross: DXY strength / Risk aversion
      • Levels: 0.5850 / 0.5950
    • USD/CHF (Swissy):
      • Direction: Bullish
      • Domestic (CH): SNB easing / Yield disadvantage
      • Cross: Safe-haven unwind / DXY strength
      • Levels: 0.7800 / 0.7850
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Neutral, Neutral, Bullish
      • Domestic: Relative CB stance + yields
      • Cross: DXY / Risk / cross-of-crosses dynamics
      • Levels: 0.8500-0.8600 / 170.00-171.00 / 192.00-193.00
    • XAU (Gold):
      • Direction: Bearish
      • Domestic (asset-specific): Rising real yields / Reduced haven demand
      • Cross: DXY strength / Risk-off waning
      • Levels: 4500 / 4550
    • XAG (Silver):
      • Direction: Bearish
      • Domestic (asset-specific): Industrial demand lackluster
      • Cross: DXY strength / Risk-off waning
      • Levels: Lower toward 47
    • WTI / Brent:
      • Direction: Bullish
      • Domestic (asset-specific): Hormuz disruption / OPEC restraint
      • Cross: DXY influence / Risk regime
      • Levels: 100 / 105
    • Copper:
      • Direction: Neutral
      • Domestic (asset-specific): China stimulus needs affirmation
      • Cross: Global growth proxy / DXY
      • Levels: $5.00 / $5.10
    • SPX:
      • Direction: Bearish
      • Domestic (US): Earnings worries / Fed on hold / Rising yields
      • Cross: VIX spike / Geopolitical tension
      • Levels: 5100 / 5150
    • NDX:
      • Direction: Bearish
      • Domestic (US): Real yields / Mega-cap scrutiny
      • Cross: Rate sensitivity / VIX
      • Levels: 18250 / 18400
    • US30 (Dow):
      • Direction: Bearish
      • Domestic (US): Cyclical concerns / Bond sell-off
      • Cross: Bond-yield impact
      • Levels: 38500 / 39000
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Sterling level / Gilt impact
      • Cross: Global risk / US tone
      • Levels: 10300 / 10400
    • DAX:
      • Direction: Bearish
      • Domestic (DE): Bund pressure / EU outlook dimmed
      • Cross: US tech spillover / DXY
      • Levels: 23800 / 24200
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY rebound limiting gains
      • Cross: US tech / Risk regime
      • Levels: 59000 / 60000
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): ETF flow stalling / Funding rate high
      • Cross: DXY impact / Risk regime
      • Levels: $79000 / $81000

    Positioning watch: Dollar, Aussie, Copper and Bitcoin are crowded longs and vulnerable to disappointment; Yen, Kiwi, and Nasdaq are crowded shorts and vulnerable to squeezes. Watch for correlated reversals if headlines shift.

    The pain trade: A de-escalation of Middle East tensions, combined with surprisingly dovish comments from Macklem at 15:30 ET, could trigger a rapid unwinding of oil longs and a short squeeze in risk assets, particularly Nasdaq.

  • Euro Bids Higher as ECB Rate Cut Bets Solidify – Monday, 4 May

    Where we are: EUR/USD is currently trading around 1.1705, having broken above the overnight high of 1.1695. The pair held a tight range overnight, finding support near 1.1670. This level is just above the prior NY close of 1.1665, with the break above suggesting building bullish momentum heading into the New York open.

    What’s driving it: The Euro is catching a bid as market participants are increasingly pricing in a June rate cut by the ECB. ECB speakers are walking a fine line, but the recent 25bp cut at the April 17th meeting, combined with the mild easing bias, keeps the pressure on. While Kazimir is pushing back against this narrative, suggesting a June rate hike is “all but inevitable,” the market is clearly leaning the other way, especially given the Eurozone HICP at 2% and Core HICP at 2.3%. We believe the market is pricing in a higher probability of continued easing as the data trajectory leans dovish.

    • The ECB’s Survey of Professional Forecasters for Q2 2026 showing that Euro-Zone inflation is seen as temporary supports the doves’ argument for further easing.
    • Speculator positioning in EUR is modestly long at +35,712 contracts, but this is at the 10th percentile over the last 52 weeks, suggesting squeeze risk is relatively low.
    • The rise in oil prices (WTI Crude at $99.89) could add to inflationary pressure, potentially staying the ECB’s hand.

    NY session focus: The 08:30 ET data dump will be crucial; watch for reactions in the US 2Y (currently 3.88%) and 10Y (4.4%) yields. A soft print would likely accelerate the Euro bid, targeting the 1.1750 level. A strong print would test the resolve of the ECB easing narrative, potentially pushing EUR/USD back towards 1.1650. The trade that’s working right now is fading hawkish ECB rhetoric and buying dips. The trade at risk is shorting EUR/USD ahead of potential upside surprises. The pain trade for EUR/USD is a hawkish repricing by the ECB, fueled by a significant re-acceleration in services inflation.

  • NY Session Tactical Brief – Friday, 1 May

    Regime: Mixed — VIX is elevated at 18.81, while US 10Y yields are up 6bp on the day, suggesting a grind higher driven by real-rate repricing.

    Today’s market themes:

    • Real-rate repricing: higher yields pressuring risk assets amid sticky inflation data
    • USD/JPY intervention risk: markets remain on high alert after suspected BOJ action yesterday
    • ISM Manufacturing: US data in focus to confirm or deny disinflation narrative

    The setup: With US 10Y yields at 4.42%, the market is testing the upper end of its recent range. The trade is to fade risk assets on rallies, especially tech, given the real-yield headwinds. The risk is a dovish surprise from ISM data, which could lead to a relief rally.

    Watch list (native time per event):

    • 10:00 ET USD: ISM Manufacturing PMI (forecast 53.1, prior 52.7)
    • 10:00 ET USD: ISM Manufacturing Prices (forecast 80.0, prior 78.3)

    Bias by asset:

    STRICT SILO RULE: For every non-USD asset, the Domestic line MUST contain only domestic content (home central bank / domestic data / domestic yield / domestic political-fiscal driver). USD, DXY, Fed, US yields, and risk regime go in the Cross line — never in Domestic. If no fresh domestic catalyst exists, write “No fresh domestic catalyst — sensitive to US response” in Domestic. For commodities, Domestic = real-yields / supply / inventories / flows. For BTC, Domestic = funding / ETF flow / on-chain.

    • DXY:
      • Direction: Bullish
      • Domestic (US): Strong US yields, data dependent Fed
      • Cross: Risk aversion, hawkish repricing
      • Levels: Resistance at 119.00, support at 118.50
    • EUR/USD:
      • Direction: Bearish
      • Domestic (EU): ECB dovish pivot, sovereign risk
      • Cross: DXY strength, rising US-DE 10Y spread, risk-off flows
      • Levels: Resistance at 1.1750, support at 1.1700
    • GBP/USD (Cable):
      • Direction: Neutral
      • Domestic (UK): BoE relatively hawkish, but growth concerns linger
      • Cross: DXY strength offsets UK yield support
      • Levels: Resistance at 1.3650, support at 1.3580
    • USD/JPY:
      • Direction: Bullish, but cautious
      • Domestic (JP): BoJ still dovish, intervention risk limits upside
      • Cross: US 10Y strength trumps intervention fears
      • Levels: Resistance at 157.00, support at 156.00
    • USD/CAD (Loonie):
      • Direction: Bullish
      • Domestic (CA): BoC cautious, oil link provides limited support
      • Cross: DXY strength, widening US-CA 10Y yield differential
      • Levels: Resistance at 1.3650, support at 1.3580
    • AUD/USD (Aussie):
      • Direction: Bearish
      • Domestic (AU): RBA hold weighs, commodity prices mixed
      • Cross: DXY strength, China growth concerns
      • Levels: Resistance at 0.6550, support at 0.6500
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response
      • Cross: DXY strength, risk-off sentiment
      • Levels: Resistance at 0.5950, support at 0.5900
    • USD/CHF (Swissy):
      • Direction: Bullish
      • Domestic (CH): SNB easing supports USD/CHF
      • Cross: DXY strength, safe-haven flows
      • Levels: Resistance at 0.7850, support at 0.7750
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP: Neutral, EUR/JPY: Bullish, GBP/JPY: Bullish
      • Domestic: ECB dovish vs BoE hawkish, BoJ dovish drives JPY weakness
      • Cross: Risk-off hurts EUR/GBP, risk supports JPY crosses
      • Levels: EUR/GBP: 0.8550-0.8600, EUR/JPY: 170.00-171.00, GBP/JPY: 192.00-193.00
    • XAU (Gold):
      • Direction: Bearish
      • Domestic (asset-specific): Rising real yields undermine gold
      • Cross: DXY strength adds to downward pressure
      • Levels: Resistance at $4,620, support at $4,580
    • XAG (Silver):
      • Direction: Bearish
      • Domestic (asset-specific): Industrial demand stable, Gold-Silver ratio favoring Gold
      • Cross: DXY strength, risk-off sentiment
      • Levels: Resistance at $45, support at $44
    • WTI / Brent:
      • Direction: Neutral
      • Domestic (asset-specific): Supply concerns offset by demand worries
      • Cross: DXY strength, risk-off sentiment
      • Levels: WTI: Resistance at $106, support at $104
    • Copper:
      • Direction: Bearish
      • Domestic (asset-specific): China growth uncertain, LME stocks rising
      • Cross: DXY strength, global growth slowdown
      • Levels: Resistance at $4.50, support at $4.40
    • SPX:
      • Direction: Bearish
      • Domestic (US): Rising yields pressure valuations
      • Cross: Elevated VIX, global uncertainty
      • Levels: Futures level 5,290, cash support 5,250, resistance 5,320
    • NDX:
      • Direction: Bearish
      • Domestic (US): Real yield impact on valuations, earnings priced in
      • Cross: Rates sensitivity, VIX spike
      • Levels: Resistance at 18,100, support at 18,000
    • US30 (Dow):
      • Direction: Neutral
      • Domestic (US): Industrial and financial earnings mixed
      • Cross: Bond-yield sensitive, could lag
      • Levels: Resistance at 38,900, support at 38,700
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Sterling weakness cushions downside
      • Cross: Global risk-off, US negative lead
      • Levels: Resistance at 10,350, support at 10,300
    • DAX:
      • Direction: Bearish
      • Domestic (DE): Bund yields up, EU growth concerns
      • Cross: US tech weakness, DXY strength
      • Levels: Resistance at 24,500, support at 24,300
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY strength weighs, BOJ stance limits upside
      • Cross: US tech direction, risk sentiment
      • Levels: Resistance at 59,600, support at 59,300
    • BTC:
      • Direction: Bearish
      • Domestic (asset-specific): Funding rates high, ETF inflows slowing
      • Cross: DXY strength, risk-off sentiment, Nasdaq correlation
      • Levels: Resistance at $61,500, support at $60,000

    Positioning watch: USD, AUD, Copper, and Bitcoin are all crowded longs above the 80th percentile, indicating significant squeeze risk on any negative surprises. JPY and NZD remain crowded shorts, susceptible to a squeeze if data improves or the BOJ hints at tightening.

    The pain trade: A soft ISM print would trigger a relief rally in risk assets, squeezing crowded USD longs and benefiting JPY/NZD shorts.

  • Euro Set to Test 1.1750 on ECB Hold – Friday, 1 May

    Where we are: EUR/USD is trading around 1.1715, drifting sideways in early European trade. Overnight, the pair ranged between 1.1690 and 1.1725. This level is slightly above yesterday’s New York close near 1.1705, however, price action has struggled to build momentum so far this morning.

    What’s driving it: The Euro is holding steady after the ECB’s latest monetary policy decision on Thursday, where they cut rates by 25bp to 2.50% but retained a meeting-by-meeting approach. The central bank acknowledged heightened inflation risks but also noted growth concerns. There’s no fresh domestic catalyst today; traders are looking ahead to the June meeting, with data-dependent doves eyeing the wage tracker softening and services HICP near 3% as support for a follow-up cut.

    • Lagarde’s press conference confirmed the unanimous decision to hold rates steady, though a hike was discussed.
    • Hawkish ECB official Nagel cautioned the central bank might need to tighten policy as early as June, citing a worsening inflation outlook.
    • Speculator positioning in EUR is modestly long at +41,324 contracts, near the 10th percentile, reducing squeeze risk relative to shorted peers (JPY, GBP).

    NY session focus: All eyes on the 10:00 ET ISM Manufacturing PMI and ISM Manufacturing Prices data. A strong print above 53.1 could reignite USD strength, pushing EUR/USD back towards 1.1650, while a weaker reading could see a test of the 1.1750 level, and potentially 1.1775. The trade that is working is fading intraday rallies. The trade that is at risk is chasing the breakout beyond 1.1750. The pain trade is a surprisingly weak ISM print forcing a short squeeze above 1.1800.

  • NY Session Tactical Brief – Thursday, 30 April

    Regime: Risk-on, fueled by dovish central bank pivots and a weaker DXY (98.33), as global yields decline.

    Today’s market themes:

    • Dovish repricing of global central bank outlooks, with focus on BoE and ECB.
    • USD weakness amplified by potential intervention risks in USD/JPY, testing multi-decade highs.
    • Geopolitical tensions (US-Iran) continue to underpin commodities volatility.

    The setup: Markets are positioned for lower rates globally, but BoE and ECB decisions are crucial. The trade is to fade USD strength on any hawkish surprises. Risks include stronger US data or escalation of geopolitical tensions. US 10Y at 4.389% and DXY at 98.33 are key levels.

    Watch list (native time per event):

    • 08:30 ET CAD: GDP m/m (forecast 0.2%, prior 0.1%)
    • 12:00 BST GBP: BoE Monetary Policy Report
    • 14:15 CET EUR: Main Refinancing Rate (forecast 2.15%, prior 2.15%)

    Bias by asset:

    • DXY:
      • Direction: Down
      • Domestic (US): Fed on hold, focusing on inflation; data-dependent bias.
      • Cross: Dovish global CB pivots weighing; intervention watch impacting.
      • Levels: Support at 98.00, resistance at 98.75.
    • EUR/USD:
      • Direction: Up
      • Domestic (EU): ECB likely dovish, but watchful of inflation and fragmentation.
      • Cross: Weaker DXY, supporting; focus on US-DE 10Y spread widening.
      • Levels: Support at 1.1650, resistance at 1.1720.
    • GBP/USD (Cable):
      • Direction: Neutral
      • Domestic (UK): BoE holds steady; focus on inflation persistence.
      • Cross: DXY softness helps; US-UK 10Y spread still favoring USD.
      • Levels: Support at 1.3450, resistance at 1.3550.
    • USD/JPY:
      • Direction: Down
      • Domestic (JP): Intervention risk elevated; BoJ still dovish.
      • Cross: US 10Y dropping; risk aversion flows boosting JPY.
      • Levels: Support at 155.50, resistance at 157.50.
    • USD/CAD (Loonie):
      • Direction: Down
      • Domestic (CA): GDP key; BoC cautious; commodity support.
      • Cross: Weaker DXY; US-CA 10Y spread compression.
      • Levels: Support at 1.3645, resistance at 1.3700.
    • AUD/USD (Aussie):
      • Direction: Up
      • Domestic (AU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness; Copper prices boosting; China growth hopes.
      • Levels: Support at 0.7100, resistance at 0.7170.
    • NZD/USD (Kiwi):
      • Direction: Up
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness; risk-on sentiment supporting; squeezed shorts.
      • Levels: Support at 0.5820, resistance at 0.5880.
    • USD/CHF (Swissy):
      • Direction: Down
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY drop; safe-haven demand waning; yields declining.
      • Levels: Support at 0.7830, resistance at 0.7900.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP: Neutral; EUR/JPY: Down; GBP/JPY: Down.
      • Domestic: See individual currency biases for CB divergence.
      • Cross: DXY influence; risk appetite dictating flows.
      • Levels: Watch key support/resistance on the individual crosses.
    • XAU (Gold):
      • Direction: Up
      • Domestic (asset-specific): Real yields still supportive; geopolitical bids strong.
      • Cross: Weaker DXY; safe-haven demand persisting.
      • Levels: Support at 4550, resistance at 4660.
    • XAG (Silver):
      • Direction: Up
      • Domestic (asset-specific): Industrial demand increasing; Gold-Silver ratio still elevated.
      • Cross: DXY weakness; risk-on tone helping.
      • Levels: Support at 7150, resistance at 7450.
    • WTI / Brent:
      • Direction: Neutral
      • Domestic (asset-specific): Supply concerns remain; EIA inventories in focus.
      • Cross: DXY influence; geopolitical risk premium embedded.
      • Levels: WTI support at 103.00, resistance at 106.00.
    • Copper:
      • Direction: Up
      • Domestic (asset-specific): China growth hopes remain; LME stocks watched.
      • Cross: Global growth proxy; DXY weakness aiding.
      • Levels: Support at 590, resistance at 605.
    • SPX:
      • Direction: Up
      • Domestic (US): Earnings positive; Fed on hold supporting.
      • Cross: VIX subdued; global risk appetite constructive.
      • Levels: Futures support at 7130, resistance at 7220.
    • NDX:
      • Direction: Up
      • Domestic (US): Mega-cap earnings driving gains; real yields remain low.
      • Cross: Rates sensitivity still relevant; VIX relatively calm.
      • Levels: Support at 27200, resistance at 27700.
    • US30 (Dow):
      • Direction: Up
      • Domestic (US): Cyclical earnings holding up; financial sector performing.
      • Cross: Bond-yield reaction contained; risk-on flowing through.
      • Levels: Support at 48700, resistance at 49500.
    • UK100 (FTSE):
      • Direction: Up
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: Global risk appetite boosting; US tone constructive.
      • Levels: Support at 22100, resistance at 22500.
    • DAX:
      • Direction: Up
      • Domestic (DE): No fresh domestic catalyst — sensitive to US response.
      • Cross: US tech strength helpful; DXY weighing less; risk regime strong.
      • Levels: Support at 23700, resistance at 24200.
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): No fresh domestic catalyst — sensitive to US response.
      • Cross: US tech providing support; risk appetite generally good.
      • Levels: Support at 58900, resistance at 59500.
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): ETF flows stable; funding rates watched.
      • Cross: DXY weakness supporting; Nasdaq correlation remains intact.
      • Levels: Support at 75000, resistance at 77000.

    Positioning watch: JPY remains the most crowded short (0%ile), making it vulnerable to a squeeze on any hawkish BoJ surprise or intervention. Copper, AUD and Bitcoin also hold crowded long positions (>80th percentile), making them vulnerable to sharp selloffs on weaker China data, stronger DXY or a risk-off event.

    The pain trade: A hawkish BoE or ECB surprise would trigger a violent short squeeze in USD/JPY and a broader risk-off move, hammering crowded longs in AUD, Copper and Bitcoin.

  • Euro Bounces, Primed for ECB Rate Decision – Thursday, 30 April

    Where we are: EUR/USD currently trades at 1.1694, up 0.15% on the session and bouncing from an overnight low of 1.1656. The pair is testing the upper end of its intraday range (1.1656-1.1719), with the prior NY close representing initial resistance. A sustained break above 1.1719 would open the door to further gains.

    What’s driving it: The Euro is finding some support ahead of today’s ECB announcements, though the overall tone remains cautious. The central bank, following its recent 25bp cut on April 17th, is widely expected to hold steady today, keeping the deposit facility rate at 2.50%. German GDP data and Eurozone CPI prints due this morning will set the stage for the ECB’s policy statement and press conference later today. The softer bund yields, with the DE 2Y down 10bp to 2.645%, reflects market expectations of continued mild easing bias from the ECB.

    • ECB cut 25bp on 2026-04-17, retaining meeting-by-meeting language.
    • Eurozone CPI Flash Estimate expected to rise to 3.0% y/y (prior 2.5%).
    • CFTC data shows net non-commercial Euro positioning at +41,324 contracts, modestly long but only at the 10th percentile, leaving room for a squeeze if the ECB surprises hawkishly.

    NY session focus: All eyes are on the ECB’s Main Refinancing Rate announcement at 14:15 CET and the subsequent press conference at 14:45 CET. Focus will be on any hints regarding the timing and magnitude of future rate cuts. A hawkish tilt could see EUR/USD test 1.1750, while a dovish stance could lead to a retest of the 1.1650 level. Ahead of that, the 08:30 ET US Advance GDP and Core PCE prints will provide competing data for the pair. The pain trade for the Euro is a hawkish ECB struggling to contain upside surprises in the US data and an Iran war continuing to stoke supply risks.

  • NY Session Tactical Brief – Wednesday, 29 April

    Regime: Mixed, as lower European equity indices and higher Brent prices offset positive sentiment from Bitcoin and US tech futures; VIX at 18.02.

    Today’s market themes:

    • BoC policy decision and press conference: Expect hawkish guidance from Macklem as inflation remains stubbornly high.
    • Hormuz Strait disruption fears support Oil: Geopolitical risks weigh as Brent hits one-month highs near $109/bbl.
    • USD awaits Fed decision: Dollar consolidating gains ahead of anticipated steady rates.

    The setup: Oil supply fears are currently the dominant driver, pushing Brent to $109. Focus now shifts to how the Fed will address these commodity price pressures at its upcoming meeting, particularly given continued indications that USD is “crowded long”. Rate decision + Powell presser could spur volatility. Watch for a DXY breakout if Powell speaks hawkishly or a sharp reversal if the Fed pivots dovishly on the recent inflation data.

    Watch list (native time per event):

    • 11:30 AEST AUD CPI m/m (forecast 1.3%, prior 0.0%)
    • 09:45 ET CAD BOC Rate Statement (forecast 2.25%, prior 2.25%)
    • 14:00 ET USD Federal Funds Rate (forecast 3.75%, prior 3.75%)

    Bias by asset:

    • DXY:
      • Direction: Neutral, awaiting Fed guidance.
      • Domestic (US): Fed policy decision, US data releases, US yield curve.
      • Cross: Risk sentiment, FX cross flows ahead of tech earnings.
      • Levels: Support 98.40, resistance 98.80.
    • EUR/USD:
      • Direction: Bearish, pressured by DXY strength.
      • Domestic (EU): Sticky Spanish inflation / peripheral spreads.
      • Cross: DXY strength, US-DE 10Y spread favoring USD, risk aversion.
      • Levels: Support 1.1690, resistance 1.1730.
    • GBP/USD (Cable):
      • Direction: Neutral.
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength, US-UK 10Y spread, risk-off flows.
      • Levels: Support 1.3490, resistance 1.3530.
    • USD/JPY:
      • Direction: Bullish, eyeing 160.
      • Domestic (JP): BoJ dovishness, intervention risk, JGB yields.
      • Cross: Rising US 10Y yield, DXY strength, risk-on flows.
      • Levels: Support 159.50, resistance 160.00.
    • USD/CAD (Loonie):
      • Direction: Neutral.
      • Domestic (CA): Hawkish BoC needed to push higher.
      • Cross: DXY strength, US-CA 10Y spread.
      • Levels: Support 1.3670, resistance 1.3700.
    • AUD/USD (Aussie):
      • Direction: Bearish, after mixed CPI data.
      • Domestic (AU): Mixed CPI response, RBA watch.
      • Cross: DXY strength, US-AU 10Y spread, China growth concerns.
      • Levels: Support 0.7150, resistance 0.7200.
    • NZD/USD (Kiwi):
      • Direction: Bearish, pressed by the RBNZ’s easing bias.
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength, US-NZ 10Y spread, risk-off flows.
      • Levels: Support 0.5850, resistance 0.5900.
    • USD/CHF (Swissy):
      • Direction: Bullish, supported by the SNB’s easing bias.
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength, safe-haven outflows from CHF.
      • Levels: Support 0.7880, resistance 0.7910.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Neutral.
      • Domestic: Relative BoE and ECB stance, relative yields.
      • Cross: DXY strength, risk sentiment.
      • Levels: Monitor key support and resistance.
    • XAU (Gold):
      • Direction: Bearish, pressured by real yields.
      • Domestic (asset-specific): Rising real yields pressuring gold.
      • Cross: DXY strength, risk aversion.
      • Levels: Support 4550, resistance 4630.
    • XAG (Silver):
      • Direction: Bearish, impacted by industrial demand.
      • Domestic (asset-specific): Demand mixed and impacted by real yields.
      • Cross: DXY strength, risk aversion.
      • Levels: Support 7180, resistance 7380.
    • WTI / Brent:
      • Direction: Bullish, supply disruption fears.
      • Domestic (asset-specific): Geopolitical factors driving surge.
      • Cross: Weaker DXY could add fuel to rally, risk on.
      • Levels: WTI support 100.00, Brent support 105.00.
    • Copper:
      • Direction: Neutral, but China key.
      • Domestic (asset-specific): Eyes on China growth, LME stock levels.
      • Cross: Global growth sentiment.
      • Levels: Support 595, resistance 603.
    • SPX:
      • Direction: Sideways, waiting on Fed and earnings.
      • Domestic (US): Eyes on earnings and Fed stance.
      • Cross: VIX regime, global macro.
      • Levels: Futures support 7160, resistance 7190.
    • NDX:
      • Direction: Neutral, focused on mega-cap earnings.
      • Domestic (US): Earnings and AI optimism.
      • Cross: Rates sensitive, watching VIX.
      • Levels: Support 27190, resistance 27320.
    • US30 (Dow):
      • Direction: Neutral, industrials in focus.
      • Domestic (US): Earnings focus and overall US data.
      • Cross: Bond yield reaction.
      • Levels: Support 49200, resistance 49420.
    • UK100 (FTSE):
      • Direction: Bearish, underperforming on Sterling strength.
      • Domestic (UK): Sterling and Gilt yields.
      • Cross: Global sentiment.
      • Levels: Support 22280, resistance 22450.
    • DAX:
      • Direction: Bearish, dragged by German yields.
      • Domestic (DE): German yields and data.
      • Cross: US tech and risk.
      • Levels: Support 23900, resistance 24100.
    • Nikkei:
      • Direction: Bearish, after BoJ inaction.
      • Domestic (JP): JPY levels and JGB yields.
      • Cross: US tech, risk.
      • Levels: Support 59700, resistance 60650.
    • BTC:
      • Direction: Bullish, trending higher.
      • Domestic (asset-specific): ETF flows supportive.
      • Cross: Risk-on environment.
      • Levels: Support 76000, resistance 78000.

    Positioning watch: USD and AUD are crowded longs, while JPY and NZD are crowded shorts. A dovish Fed surprise or positive Japanese data could trigger significant short squeezes in the JPY and NZD.

    The pain trade: A dovish hold from the Fed, coupled with commentary suggesting openness to rate cuts later this year, would trigger a sharp DXY sell-off and a rally in risk assets, catching crowded USD longs off guard.

  • Euro Under Pressure as Bund Yields Climb – Wednesday, 29 April

    Where we are: EUR/USD trades at 1.1697, down 0.15% on the day and near the bottom of its 1.1694-1.1721 intraday range. The Fiber continues to struggle below the 1.1700 handle, failing to capitalize on earlier European session attempts to rally. This comes after yesterday’s close near 1.1715, signaling a continuation of the recent bearish trend.

    What’s driving it: Euro weakness is being driven by a combination of factors, but the immediate pressure stems from rising German yields, particularly the Schatz (2Y) which is up 4bp to 2.690%. This yield move is happening in tandem with concerning regional CPI numbers, with Spanish inflation unexpectedly quickening beyond the ECB’s goal. Even with the most recent ECB cut of 25bp, markets are concerned further easing is less likely if inflation continues to accelerate. The mildly easing bias remains in place, but policymakers are clearly divided. DXY strength, currently at 98.61, is adding additional downside pressure on the Fiber.

    • The Spanish inflation print is at 3.5%, the highest since June 2024, creating doubt about ECB easing.
    • DE 2Y (Schatz) yields climbed to 2.690%, a 4bp increase on the day.
    • Speculator positioning in the Euro is modestly long at +41,324 contracts, sitting at the 10th percentile; this leaves significant room for further short positioning.

    NY session focus: Focus in the NY session shifts squarely to the FOMC decision at 14:00 ET and the subsequent press conference at 14:30 ET. Markets widely expect rates to remain unchanged at 3.75%, but any hawkish rhetoric could send the DXY higher and EUR/USD lower, potentially testing the 1.1650 level. Keep an eye on the US 2Y yield, currently at 3.879%, which is highly sensitive to Fed policy expectations. A break below 1.1690 could trigger a deeper sell-off towards 1.1600. The pain trade for EUR/USD would be a dovish surprise from the Fed, prompting a sharp rally back towards 1.1750.