There is just one key expiry level to take note of on the day, as highlighted in bold below.
That being a sizable one for EUR/USD at the 1.1400 level, with the spot price sitting roughly 40 pips away from the strike. The relative proximity and the large size of €4.9 billion is enough to matter and could potentially influence price action ahead of the cut later today.
If EUR/USD does remain more rangebound and extend a little higher in the session ahead, the expiries sitting at the 1.1400 level could exert some pull on price action and also keep any further upside momentum in check. Typically when the spot price gets closer to these sort of expiries, option-related hedging flows may help contain price around the strike rather than encourage a clean breakout.
Having said that, just be wary of the technical considerations in play for EUR/USD at the moment as well. The 100-hour moving average is sitting around 1.1384 now and will be the first layer in terms of limiting any upside price extensions. EUR/USD price action has been keeping below both key hourly moving averages for well over two weeks now, so that makes the 100-hour moving average an important technical resistance point in terms of defining near-term price bias for the currency pair.
If anything else, I would place strong emphasis on the key technical level first before considering the potential influence and impact from the expiries at 1.1400.
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.