FX option expiries on July 7 at 10 AM New York time include important positions for EUR/USD between 1.1750 and 1.1800. These expiries could limit price movements in this range until the new week starts. Market focus is on trade news and the reopening of Wall Street later in the day. The dollar is steady, but trade headlines may impact market conditions, as recent alerts suggest. This article highlights expiring currency options, especially for the euro against the dollar, with prices concentrated between 1.1750 and 1.1800. This means traders with large positions within these levels want to keep prices stable until the expiry passes. This often creates a “gravitational pull” on the spot price, minimizing movement outside these limits in the short term. With the expiry timing—right before New York opens and Wall Street reopens—price changes may be muted during the early hours. However, we can’t overlook the potential influence of any external developments, especially concerning trade agreements or disruptions, which policymakers have raised in recent days. From our view, it might be better to hold off on making directional trades until after the FX option barriers expire and liquidity from U.S. traders returns. While it’s tempting to expect a breakout, past sessions suggest that significant volatility usually returns only after these expiries, not during them. Yellen’s recent comments on trade and the global economy suggest that sentiment could be tested further later this week if more statements are made. This is significant because it can increase demand for safe-haven currencies, which often strengthens the dollar, regardless of previous price movements. With Powell set to speak later this week, interest rate expectations might come into focus again. This is important not just for interest rate traders but also for us in derivatives, as volatility pricing depends on uncertainty around rates. Additionally, any clear direction could affect implied volatilities across several G10 pairs, even if spot prices are stable. Given the broader market situation and known expiry levels in FX, avoiding high-delta option strategies until the expiry is wise. Instead, lower-delta options or short-term range strategies are more suitable until prices gain new momentum or are influenced by a major development. While we keep an eye on key support and resistance points in EUR/USD, these levels are less likely to hold during low-volatility expiry periods. Therefore, it’s the volatility measures, rather than the spot price itself, that need more immediate focus. In previous scenarios, we often observe a brief period of price drift followed by a volume spike once the expiration has passed. Traders should stay informed not only about spot prices but also about changes in skew and implied volatility, as these can provide early signals when prices break free from passive ranges caused by significant option interests.

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