• EUR/USD risk reversals increasingly favour EUR puts over calls as USD gains broad support

• Benchmark 1-month 25-delta risk reversal at 0.45 — highest since April 13, up from 0.25 last week

• Rising risk reversals signal options market expects implied vol to climb as EUR/USD drifts lower

• That's exactly what's happening — 1-month implied vol at 5.75, up from 2026 lows of 5.35 on Thursday

• But context matters - March saw 1-month vol peak 9.0 and 1-month risk reversal reach 1.5

• Current moves signal caution, not panic — EUR/USD remains well within its longer-term ranges
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility


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