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EUR/USD: Watch out for the “landmines” in the day ahead

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Large expiries likely to keep EUR/USD between 1.14 and 1.15 until tomorrow


Price continues to sit in between the two retracement levels (23.6 and 38.2) on the daily chart as buyers are unable to find a breakthrough above 1.1500 while sellers are lacking the conviction to reclaim control on the near-term chart.

But for the pair, it’s very much a case of navigating through the “mine field” in the day ahead. And I would expect price action to be contained between the 1.1400 and 1.1500 level as long as the Fed doesn’t pull off any surprises later today (and I expect the Fed to play by the book on that one).
Here’s a look at the option expiries list tomorrow for the pair:

  • 1.1375 (€1.3 bn)
  • 1.1400 (€2.2 bn)
  • 1.1425 (€3.2 bn)
  • 1.1500 (€6.4 bn)

That’s quite a sizable chunk sitting there at the 1.1500 handle and could potentially draw price action to gyrate towards that level in the sessions to come but there’s also a decent amount sitting closer to the bottom near 1.1400 as well.
So far this session, we’re not seeing any real conviction for any directional moves with the market keeping an eye on the Fed later but if we do see action in EUR/USD, do be mindful of the “landmines” that are sitting at the levels highlighted above.
Until the “landmines” are “deactivated” i.e. expiries roll off, I reckon only then will we be able to see a much clearer trend in the pair.

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