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Oct 19 - 04:55 AM

EUR/USD - Clues From The FX Options Market

By Richard Pace  —  Oct 19 - 03:15 AM
  • EUR/USD implied volatility remains heavy = actual volatility expected low

  • Risk reversals shows EUR/USD call over put premium (topside) suffering

  • Falling EUR call premium = less near term risk of EUR/USD breaking higher

  • Lack of EUR put protection sought = downside breakout risk still low

  • Traded volumes remain light too = a lack of any real conviction

  • Overall price action/flows remain consistent with range trade, for now

  • Danger point at 1.1613 range low since June and 1.1600 barriers

  • Increased threat there would lift implieds, increase EUR put buying



1-3-12-month EUR/USD risk reversals Click here

EUR/USD 1-week and 1-month implied volatility Click here

Source:
Refinitiv IFR Research/Market Commentary

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