The European Commission has rejected claims that the EU will accept a 10% US tariff. They clarified that these claims are based on speculation and do not reflect current talks. The EU has been clear in opposing US tariffs, which they see as unfair and illegal. Today, the euro rose by 36 pips to 1.1586, though it did drop slightly in the last hour. The Commission’s brief statement highlights that there is no agreement, formal or informal, on tariff levels being discussed by Brussels and Washington. By using the term “speculative,” officials are pushing back against premature assumptions or rumors. They aim to keep their negotiating options open without escalating an already sensitive situation. The earlier rise in the euro showed some optimism that a softer US approach might lead to a deal. However, the price drop towards the end of the session suggests that market participants, who may have been excited by rumors, are now reconsidering after the Commission’s clarification. The timing of this price change, right after the Commission’s statement, supports this view. Traders who followed the initial rise may now be reassessing their positions due to uncertainty. In uncertain times like this, decisions should be based on verified information. Short-term bets, especially those based on a single news item, can be risky. We need to rely more on implied volatility data and watch how prices in the 1.1550–1.1620 range behave over the next few sessions. A slightly wider spread between options suggests the market is preparing for bigger price swings but hasn’t decided on a specific direction yet. As next week’s talks approach, updates may leak unpredictably. It’s better to focus on structures that respond to volatility around these events instead of getting caught in unrealistic trades. Prices could move quickly based on the tone of comments from officials—either becoming more firm or showing some flexibility. Our advantage lies in closely monitoring confirmed changes in tone rather than pursuing unestablished positions. When prices reverse swiftly after political comments, it’s also important to observe trading volume. The euro’s early move happened with average trading volume, while the later drop showed stronger selling pressure, often a sign of institutions repositioning rather than late responses from retail investors. For those managing calendar or diagonal setups near expiration, there’s still enough time value to wait for more clarity but not so much to be complacent. If risk-reward ratios become too tight, rolling strategies might offer better options and keep exposure limited while adjusting to any sudden shifts. This is not the time to reshape overall narratives but to adjust positions based on current knowledge—and right now, what we know is that speculation remains just speculation.

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