There are two important FX option expiries to note. Both involve EUR/USD at 1.1700 and 1.1750, with the current price sitting between these levels. The daily chart shows resistance around 1.1730-40, which held back the pair’s upward movement after the US jobs report. These expiries might have a strong influence unless the dollar weakens significantly.

Start of the Week Caution

Last week’s indecision on Wall Street leads to a cautious start this week. US stocks initially reacted positively to softer labor market data but ended lower, with some late support helping the situation a bit. For more insights, check investingLive resources. In the past, large option expiries, like those at the 1.1700 level, often contain price movement. We see a similar situation now, with high open interest in EUR/USD at 1.0900 and the key level of 1.1000 for this week’s expiry. The current price is just above 1.0950, caught between these two strong points. This uncertainty follows last Friday’s August 2025 US jobs report, which showed a weak job growth headline but surprisingly high wage growth. This mixed data has left the Federal Reserve’s next steps uncertain, resulting in limited movement in the US dollar. The market seems to be trading within a narrow range for now. Next week, all eyes are on the US Consumer Price Index (CPI) report for August. This release will be vital for a market still cautious about inflation. The latest July 2025 data revealed core inflation remaining at a stubborn 3.1% year-over-year, putting pressure on the Fed to keep its strict policies. Meanwhile, the ECB is adopting a more dovish tone as Eurozone manufacturing PMIs for August recently hit a two-year low of 45.2.

Anticipating the CPI Report

In the coming days, the options market’s influence suggests that selling volatility could be a smart move. Traders may explore short-dated iron condors or strangles focused around the 1.0950 level to take advantage of the expected limited movement leading up to the CPI data. This strategy seeks to profit from the decline in option values over time. Looking ahead, the CPI release could shake up the current calm. An unexpectedly high inflation figure could lead to a sharp drop in EUR/USD, potentially breaking below the 1.0900 support level. To prepare, traders might consider buying longer-dated puts or setting up bearish put spreads to capitalize on a possible downward move. Create your live VT Markets account and start trading now.

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