There are just a couple of expiry levels to take note of on the day, as highlighted in bold below.
That being for EUR/USD at the 1.1600 and 1.1650 levels. The current spot price is effectively sitting in between two very large strikes, so that creates a potentially important 1.1600–1.1650 expiry zone. One which could see hedging-related flows could contribute to more two-way or more choppy price action into the cut.
But all else being equal, the expiries can also act as bookends in keeping price action more limited within the range for the session ahead. That until we get to the ECB decision and Lagarde press conference later in the day.
In terms of technical significance, the expiries do tie in slightly with the 200-day moving average at 1.1632. That is one key level that has limited topside price action for EUR/USD since last week already. So, that will be another consideration factor alongside the ECB outside of the typical expiries pull.
Besides that, there is also the 100 and 200-hour moving averages sitting at 1.1612-25 which could help to provide some floor for price action before we get to the ECB later today.
In essence, the expiries are pretty much just helping to reinforce the technical push and pull we’re seeing from the above for the time being.
As per the usual caveat, do remember that these are contextual levels rather than directional signals. Things like major data, central bank headlines, and/or broader risk moves can overwhelm any expiry-related influence.
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.