• USD slips, EUR gains on Iran peace deal hopes — but EUR/USD upside proving limited so far as caution prevails

• EUR/USD recovers 1.1649 from Thursday's early-April low of 1.1576 — but 18-19 May highs at 1.1662/61 cap the move

• Bulls need a close above the 55-dma at 1.1645 to gain conviction — the 200-dma at 1.1682 remains the bigger hurdle

• FX option implied vols stay pinned just above pre-Iran conflict lows — lack of realised vol capping demand of late

• Risk reversals easing — EUR call premiums over puts narrowing as downside pressure on EUR/USD fades with peace hopes

• Cash hedging of large FX option strikes helping anchor EUR/USD of late — more notable expiries due in the 1.16s Monday
EUR=EBS


EUR/USD 25 delta risk reversals


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