Currency option expiries on radar for Oct 8 NY cut
Key FX option expiries for Oct 8 include EUR/USD at 1.1150 and USD/JPY at 158.00, with bond yields driving dollar sentiment.
US dollar weakens in early trading; yen strongest, NZD weakest. Equities slide, oil rallies on Middle East tensions.
In early trading, the US dollar is falling against most major currencies.
The biggest drop comes against the Japanese yen, with USDJPY declining about 0.40%. The dollar is also weaker against the euro, pound, Swiss franc, Canadian dollar and Australian dollar. The New Zealand dollar is the only major currency where the greenback is making gains, though just by roughly 0.10%.
That puts the yen as the strongest among the major currencies, while the kiwi is the weakest.
In today's morning video, I examine the technical setup for EURUSD, USDJPY and GBPUSD.
For each currency pair, I specify the thresholds that could give either buyers or sellers greater influence. These technical levels give traders a guide: holding above a key level leans bullish; falling below it lets sellers regain control. The same marks also help traders define and manage their risk.
US stock futures point lower
US equity futures are declining after the major benchmarks fell for a second straight day yesterday.
That ongoing softness keeps a defensive tone in the market as traders await US inflation data. The Producer Price Index arrives on Thursday, followed by the Consumer Price Index on Friday.
European shares are sharply lower
European equity markets are also under selling pressure:
Despite the weakness in global stocks, the US dollar is not drawing broad safe-haven flows. Instead, the yen is benefiting the most from the more cautious environment.
U.S. yields are mixed
US Treasury yields are slightly higher on the short end but lower in the 30-year segment:
Other markets
Crude oil is climbing sharply, and gold and silver are also advancing.
Oil is rallying as Middle East tensions continue to rise.
Overnight, the US military said it struck five Iranian oil tankers after Iran attempted to attack a US warship. Iran retaliated with missiles aimed at a US military base in Jordan and also said it hit vessels near the Strait of Hormuz. The US denied that any of its ships were struck.
That escalation follows Iran-backed Houthi attacks on Saudi cities and energy infrastructure earlier this week.
For traders in crude, the worry is that the conflict is moving closer to oil tankers, production sites and key shipping lanes. The Strait of Hormuz remains the primary concern. Any further disruption through that vital waterway could squeeze global supply.
That risk is adding a geopolitical premium to oil prices. WTI crude is up $2.53, or 2.7%, at $95.56, while Brent crude has moved above $100 per barrel (at $100.90 currently). In other markets:
With equities falling, commodities rising and the dollar weakening against most major currencies, traders face several competing forces.
The technical picture can help cut through that noise. Let’s get into the charts and identify the levels that will determine whether the buyers or sellers are in control in the EURUSD, USDJPY and GBPUSD.
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Key FX option expiries for Oct 8 include EUR/USD at 1.1150 and USD/JPY at 158.00, with bond yields driving dollar sentiment.
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