• EUR/USD option buyers back in force over the last 48 hours and all prices marked higher

• Spot weakness appears to have run further than expected, reigniting volatility and downside hedging

• Risk reversals have seen their EUR put over call implied vol premium lifted across all maturities

• 1-month 25 delta risk reversals reach 0.7 from 0.2 this week - high since the late July peak at 0.9

• That's rewarding those long implied volatility from recent/long term lows - 1-month now 5.5 from 4.7 Monday

• Traded option data shows a big drop in existing positions below 1.1400 which means less FX hedging/support

• Expect further option price increases if 24 June 1.1325 low since May 2025 is threatened/breached

• Related - FX options wrap - EUR/USD downside, USD/JPY intervention risks grow
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


EUR/USD FXO option strikes expiring through end October

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