Bond yields have moved a long way in favour of EUR/USD basing, and a weaker yuan should support big components of China's trade-weighted currency basket, such as the euro .
The euro is a safer asset, so risk averse markets should support it, too, but there's a problem.
Few traders are short, and the interest rate gap still favours a bigger drop .
Traders have never been short enough of EUR/USD this year to bring on a squeeze, and those who did not sell have missed out on more than 2% of interest rate returns.
For bets on EUR/USD's direction, dips towards 1.1000 represent value to buy, since the support provided by option barriers makes stop placement below 1.1000 an easy decision and a low cost, too.
Should 1.1000 break, lack of option interest below , coupled with few bearish bets, may see the mid 1.08s reached quickly, and perhaps 1.0500 medium-term.