EUR/USD, USD/JPY, NOK/USD flows - Weaker equities, higher oil, positioning, options...
USD/JPY offer weight tells, heavy equity, expiries weigh; dollar generally still long trimming as techs softer
Oil jittery, at the recent highs, amid negative regional report, NOK continues retracement rally
EUR/USD still warning with n/t divergent price action, and with large options above
Oil around the recent highs, Brent front month just off $112, supported by the generally negative news flow, including reports that US ‘quietly scaling back troop and diplomat presence across Middle East’, ships being hit, and a drop in EIA inventories. NOK extends its continued rally against that backdrop especially, with USD/NOK extending through 68% back on the end-Sep to start-Sep rally. 9.26~ next lower level.
Notable that against this backdrop and of course the ongoing spread worries, EUR/USD has been nudging higher, still suggesting that positioning (as well as nearby option expiries) tending to dominate in the very immediate window, divergent price action that can be a warning on a short horizon. Big expiries up at 1.13 might prove magnetic is a mini squeeze can be engineered.
USD/JPY equally interesting, still reflecting the recent underlying weight of offers that have been quietly sitting on the pair in recent days, eventually telling with the shaper late Asia selloff. With equity risk sentiment weak, Nikkei off to 3-month lows, that continues to offer JPY more ‘traditional’ risk-off support. Heavier AI mood also still tending to feed into a drag on the dollar more widely, given positioning and flows context, as discussed in the weekly, Nasdaq -1.6%.. Again, expiries also likely relevant with the selloff taking to the 157.50 to 157 area that is the focus of today and tomorrow.