• EUR/USD unable to close above the 200-dma at 1.1634 - a break might encourage bulls toward 21 Aug highs at 1.1711

• Limited/familiar ranges continue to weigh on FX option prices - implied volatility languishes at long term lows

• Even overnight expiry which includes the more significant than usual PPI data, is only marginally above recent lows

• Actual/realised volatility measures are below implied - further sapping incentive for long option positions

• Directional trades remain limited too - further evidence that the EUR/USD FX option market is lacking conviction

• Risk reversal contracts recognise the lack of conviction too - all expiry dates returning to a neutral, from downside bias

• Related - FX option expiries - the big strikes for Wednesday September 9
EUR/USD FX options


EUR/USD 25 delta risk reversals

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