FX option expiries are set to influence market movements today at 10 am New York time. The expiries involve several key currency pairs. For EUR/USD, there are notable expiries at the 1.1380, 1.1400, and 1.1425 levels.
The options around 1.1400 are especially large. They could anchor the price action near this level. This comes as the market awaits the European Central Bank policy decision later today.
The market is pricing in a 25-basis-point rate cut with approximately 97% certainty. However, the expiries may limit the range the euro trades in. USD/JPY has expiries at the 143.00 level.
These could constrain price movements until there is a notable shift in dollar sentiment.
FX option expiries impact market dynamics
The pair has seen volatility this week, especially during US trading hours.
The option levels could continue to affect this. USD/CHF expiries at 0.8200 are also in play, but lack significant technical weight. Any impacts would likely follow the pattern seen in the USD/JPY exchange rate.
This would depend largely on overall dollar flows and sentiment. Upcoming trade headlines and the US jobs report tomorrow could be factors. For AUD/USD, expiries at 0.6490 and 0.6500 are likely to cap any significant upside.
This is unless there are broader dollar selling pressures. Buyers would need strong conviction to overcome these levels meaningfully. As always, the key factor is the overall market sentiment towards the dollar.
This continues to shape trading dynamics across these currency pairs.