Today’s notable foreign exchange option expiry for EUR/USD occurs at the 1.1700 level. Offers positioned at this mark since last week have limited gains after the US CPI report. These expiries may restrict price movements until US trading starts. Although the dollar is weak this week, traders expect a rate cut from the Fed in September.

Significant Options Expiry

We have an important options expiry for EUR/USD today at the 1.1700 level. This number has acted as a ceiling for the pair, particularly capping gains after the US inflation report yesterday. These expiries are likely to keep the price stable, at least until the morning session ends. In a broader view, the US dollar is currently in a weak state. Yesterday’s Consumer Price Index report for July 2025 showed core inflation easing to 2.8% year-over-year, the lowest since early 2024. This decline in price pressures adds to the dollar’s soft position. As a result, derivative markets are almost fully pricing in a Federal Reserve rate cut for the upcoming September meeting. Data from the CME FedWatch Tool shows over a 90% chance of a 25-basis-point rate reduction. This expectation is a significant factor weighing on the dollar.

Potential Rate Cut Impact

This shift in policy marks a big change from the aggressive rate hikes throughout 2023 and the prolonged high plateau during much of 2024. The latest Non-Farm Payrolls data from early August, which showed an unexpected increase of only 155,000 jobs, has further solidified this cautious outlook. We are clearly in a different economic phase now. In the short term, traders could think about selling short-dated call options with a 1.1700 strike price to capitalize on this barrier. This strategy would profit if the price doesn’t rise above this point before the options expire. It’s a way to take advantage of the expected range-bound action. Looking ahead a few weeks, the weak dollar suggests preparing for a possible breakout higher in EUR/USD. Buying call options with September or October expiries at strike prices like 1.1750 or 1.1800 could capture any potential upside. This would be a bet that the pair will rally once the Fed officially indicates the start of its easing cycle. Create your live VT Markets account and start trading now.

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