Indicative rates at the start of the new FX week show little change from late Friday. Here are the current rates: – EUR/USD: 1.1781 – USD/JPY: 144.46 – GBP/USD: 1.3644 – USD/CHF: 0.7944 – USD/CAD: 1.3644 – AUD/USD: 0.6559 – NZD/USD: 0.6060 Monday mornings usually have low market liquidity. This should improve as more Asian centers open, which may lead to some price fluctuations, so it’s best to be cautious. During the early Asian hours, liquidity remained thin. Initial rates show limited price movement, but updates from regional economies could impact short-term positions. As trading sessions in Tokyo, Singapore, and Hong Kong overlap, activity will increase, and spot rates may start to respond more strongly to macro factors. With EUR/USD near 1.1780 and dollar pairs generally steady, there’s noticeable hesitance to break recent technical levels. This suggests that many traders are waiting for directional cues from upcoming data later this week. Volumes should rise as more institutional investors return after the weekend, meaning those with leveraged bets might react sharply to even minor news. Friday’s close still holds influence, especially since quarter-end rebalancing flows have mostly passed. This allows current levels to shift based more on expectations rather than sheer flows. For instance, GBP/USD remains in the mid-1.3600s, with no significant change in front-end rate pricing, indicating that the pair is more affected by external sentiment than significant domestic news. We should also closely monitor Yen pairs, especially USD/JPY. With the rate around 144.50, near a key resistance level, any signs of intervention rhetoric from Tokyo or changes in US yield direction could lead to significant reactions. We should be cautious of narrow ranges, as low liquidity can lead to short squeezes or profit-taking pullbacks that may be hidden. In commodity-linked currencies, AUD/USD has stayed above 0.6550, even with weaker risk indicators in equity futures. This suggests that former sellers may hesitate to push for further declines without robust data or shifts in commodity prices. Similarly, USD/CAD is closely tracking GBP/USD, indicating that broader dollar positioning is currently more influential than local factors. At this stage of the week, we’re focusing on short-term option pricing to assess implied volatility. If pricing deviates from last week’s trend, traders might begin to position around upcoming central bank speakers or inflation data from North America. The CHF and JPY are sensitive to relative rate movements, and while USD/CHF is at 0.7944, even small changes in yield expectations could alter its pace. It’s important for us to monitor futures open interest and any changes in speculative net positioning. This helps us see if major players are leaning towards continued movement or just temporary adjustments. As Asia transitions into Europe’s market, patterns in cross flows will become clearer, and any sustained divergence from last night’s indicative levels could provide scalping or momentum opportunities. It’s wise to be careful with stops and avoid closely anchoring trades to early Monday rates. False breakouts during low liquidity often attract frustrated volume, leading to quicker reversals once more players enter the market.

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