• Break of option barriers typically increases short gamma positioning

• Short gamma covering can drive FX spot and option implied volatility higher

• EUR/USD has broken 1.1000-1.1100 barriers in quick succession early Thursday

• Option's were already primed for higher EUR/USD with 1.1200 a popular target

• EUR/USD risk reversals extend 5-year highs for topside strikes in size

• 1-month paid 0.75-0.8, 3-month paid 0.45-0.55 on 1.5-bln euros a leg
1-week and 1-month expiry EUR/USD FXO implied volatility


EUR/USD risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)