Market Analysis

Sizeable Option Expiries Greet The New Week In Euro/dollar

The strong performance of French President Emmanuel Macron’s party in the first round of France’s Parliamentary elections may not have overly-invigorated the fortunes of the euro (EURUSD) in the Asian session but there may have been reasons for that. Looking ahead, Wednesday’s Federal Reserve meeting should deliver another 0.25 per cent rise in US interest rates although market attention will likely focus more on the US central bank’s forecasts for the pace of further rate hikes. But if the prospect of monetary policy adjustment might have been at the back of traders’ minds on Monday in Asia, perhaps their immediate focus was also on the implications of a plethora of option expiries in euro/dollar at 1500h London time on Monday.

ThomsonReuters IFR (TRIFR) have identified a number of sizeable option expiries that traders may consider will help shape, or perhaps contain, the range on Monday up until expiry. On the downside, TRIFR have noted 1.2 billion euros of expiries at 1.1100 and 1.3 billion at 1.1125-30. Additionally TRIFR have pointed out the existence of 1.8 billion euros of expiries at 1.1170-75 and 1 billion at 1.1200-05, while higher up sees some 640 million euros of expiries at 1.1250 and almost 1.6 billion at 1.1290-1.1300.