Expiring foreign exchange options for August 4 are important for the EUR/USD pair, especially between 1.1550 and 1.1600. The US dollar weakened after last week’s job report revealed significant downward revisions to payroll figures. Additionally, the dismissal of the BLS chief and shifts in Fed funds futures toward a potential September rate cut further contributed to the dollar’s decline. Consequently, EUR/USD is currently trading between 1.1497 and 1.1610, its major hourly moving averages.

Euro Us Dollar Expiry Importance

The EUR/USD expiry near 1.1600 holds more significance and may limit volatility during European trading hours. These expiries could keep price movements steady until Wall Street opens. We observe substantial EUR/USD option expiries between 1.1550 and 1.1600, which might limit the pair’s upside in the short term. This comes after the dollar’s decline following a disappointing U.S. jobs report, which showed only 95,000 new jobs in July compared to an expected 180,000. These expiries are likely to keep price movements subdued, especially during the European session. The market is responding strongly to signs of slowing growth, with Fed funds futures indicating a 70% likelihood of a rate pause in September. This marks a significant shift from a month ago when a rate hike was still considered. With last month’s core CPI at a stubborn 3.8%, the Federal Reserve faces a tough situation.

Derivative Trading Strategies

This environment feels reminiscent of the sharp changes in sentiment we witnessed in 2023 when economic data prompted sudden shifts in central bank policies. Back then, dollar volatility surged following key jobs and inflation reports. We can anticipate similar fluctuations now as the market assesses whether this is a fleeting issue or the beginning of a new trend. For derivative traders, selling short-dated call options with strike prices above the 1.1610 resistance level could be a good strategy for collecting premium. Conversely, those who believe in the ongoing weakness of the dollar might see this as a chance to buy longer-dated call options, expecting a breakout later in the quarter. Monitoring the pair’s reaction around its key moving averages near 1.1497 will be essential for timing any trades. Create your live VT Markets account and start trading now.

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