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.
USD/JPY rose to a three-week high near 158.30, driven by a surge in Treasury yields above 5% after strong US data and a weak bond auction.
USD/JPY has recovered to near three-week highs around 158.30 after briefly dipping below 158.00 during Asian trading earlier.
The pair's overnight peak was 158.40, just beneath several important technical points. The primary driver behind the rise is a move higher in Treasury yields, which is also influencing broader markets.
Treasury yields surged, with the 10-year note breaking above 5% after toying with that level all week. Yesterday, bond vigilantes seized on several catalysts and drove yields higher.
September's US flash PMI report significantly exceeded expectations, with the composite index rising to 58.4 from 56.0, its highest since July 2021. Input costs also surged to nearly a four-year peak.
Additionally, a $70 billion five-year Treasury auction performed poorly, clearing at 5.033% with a 3.1 basis point tail and a weak 2.21 bid-to-cover ratio.
The combination of stronger growth, persistent inflation, rising oil prices, and weak bond demand creates an uncomfortable environment for Treasuries.
This is boosting the dollar broadly, with USD/JPY among the most significant gainers in major currencies.
The pair is now testing the same key resistance levels it faced overnight.
The 200-day moving average (blue line) at 158.43 is the primary resistance, currently capping further upside.
Adding to this is a trendline resistance from July and early September highs near 158.22.
A sustained break above the 158.22-43 zone would open the way to 159.00 and higher, with the 100-day moving average at 159.54 as the next key target.
However, further gains raise the risk of intervention by Tokyo authorities. The pair fell 700 pips at the start of the month and has since recovered over 500 pips.
As USD/JPY approaches the 160 psychological barrier, the likelihood of verbal pushback or intervention from Japanese officials increases to curb speculative activity.
Share to
Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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.
EUR/GBP has fallen to its lowest since June 2025, adding to signs of euro weakness amid France's fiscal troubles and broader market concerns.
USDCHF traded above its 100- and 200-hour moving averages near 0.83291, but buyers still lack strong upside momentum.
USDCAD bounced off the 200-hour MA and crossed back above the 100-hour MA, keeping the uptrend intact.