• Overnight (Thursday) expiry EUR/USD implied volatility warns of Fed induced volatility but not excessive

• Broader EUR/USD implied volatility trades near long term lows - benchmark 1-month expiry just 4.9

• Risk reversals show barely any directional volatility risk premium - 1-3-month just 0.15-0.1 EUR puts over calls

• Trade flow remains tepid and lacks any real directional bias - strikes mostly within 1.1400-1.1700 range

• Huge strike expiries in the 1.1500-1.1600 zone this week are tightening grip on current EUR/USD range

• Related comment - EUR/USD: What FX options say ahead of the Fed meeting
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals

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