EUR/USD has fallen below its level before the trade war escalated at the start of May.
That should boost confidence in bearish bets, and with 1.1100 barriers so close to current levels [1.1110 2019 low), growing bearish expectations may see those options knocked out.
The escalation of the trade war, which is risk averse in nature, should have led to a marked reduction of existing positions, and with the largest of those being EUR/USD shorts, it should have given the pair a boost.
But it barely changed the level of EUR/USD.
That clear resilience of risk appetite among currency traders, especially EUR/USD traders, will encourage more selling.
Option vols have retreated to levels that will fuel more selling by those who want to profit from a big interest rate gap, unchanged by recent events.
Swiss central bank intervention may lend the euro some support , but the rebalancing of other interventions may weigh .
EURUSD spec bets vol and fwds Click here