• Recent price action in FX options not consistent with EUR/USD gains

• Near date risk reversals were unable to hold a topside strike premium

• Hedges to cover setbacks to 1.1000 were also being bought recently

• Latest price action shows option implied volatility trading new weekly highs

• Benchmark 1-month expiry implied volatility now 6.0 from 5.6 on Monday

• 1-month 25 delta risk reversals traded 0.1 for EUR puts over calls

• That's a new 6 week high for downside over upside strike implied volatility

• Price action shows options more concerned about EUR/USD losses, than gains

• More big strike expiries may limit FX volatility pre PCE data

For more click on FXBUZ