There is arguably just one key expiry level to take note of on the day, as highlighted in bold below.
And that will be for USD/JPY at the 158.00 mark, with the strike sitting just less than 25 pips away from the spot price. The expiries could be one to watch in keeping price action more anchored around the figure level in the session ahead, if we are to see a slight retreat in the currency pair.
To the upside, technical resistance from the 200-day moving average at 158.53 might help to limit any potential run higher in European trading. So, there is a sort of potential range for USD/JPY to play around with between 158.00 to 158.53 in the meantime.
That might be the case if dollar sentiment remains more muted and unassuming, with traders waiting to take their cues from the bond market. 10-year Treasury yields are back but pointing down to 5.19% today, affording broader markets a bit of a breather. So, that is keeping dollar sentiment very much in check for the time being.
We’ll have to see what happens when Wall Street enters the fray later but otherwise, the bond market will also likely stay more pensive ahead of the US CPI report tomorrow. So, the dollar is also likely to adopt a similar approach in the sessions ahead.
Besides the one for USD/JPY, there is a large one for EUR/USD at the 1.1290 level. But with the expiries sitting well over 100 pips away, they are not likely to have any influence on price action in the day ahead.
For more information on how to use this data, you may refer to this post here and/or refer to the Q&A below.
This article was written by Justin Low at investinglive.com.