On August 27, FX option expirations at 10 AM New York time highlight important levels for EUR/USD and USD/JPY. For EUR/USD, the major expiration is at the 1.1650 level, with the pair currently trading lower as the dollar gains strength. This level coincides with key hourly moving averages around 1.1646-57, which could act as resistance against any unexpected price increases. For USD/JPY, expirations are clustered around 147.50 and close to 148.00. This grouping is likely to limit price movements to a defined range during the session. Although the pair’s short-term outlook is more positive, it has been bouncing between 146.50 and 148.30 since early August. The expirations support this range, reinforcing the pattern.

Challenges in Providing Expiry Data

We have faced difficulties in supplying expiration data on time, but we are actively working to fix these issues. Additional resources are available for anyone who wants more information on using this data. Today, the large option expiration for EUR/USD at 1.1650 is acting like a ceiling. With the dollar remaining strong, this level—also near key hourly moving averages—will likely limit any unexpected buying pressure. This adds to the bearish sentiment we’ve seen build over the last few sessions. Looking ahead, this dollar strength appears stable, which will guide our strategy for the next few weeks. US inflation data for July 2025 came in at 3.4%, slightly over expectations, reducing hopes for a near-term rate cut by the Federal Reserve. Meanwhile, the latest Eurozone PMI data is at 49.8, indicating that economic activity is still having a tough time picking up.

Divergence in Economic Indicators

Due to this divergence, we believe that selling rallies in EUR/USD remains a sound strategy. Traders might consider using short-dated options to position for a potential retest of the August lows. We observed a similar trend throughout much of 2023, where a strong US economy kept the dollar ahead of the euro. As for USD/JPY, the cluster of expirations between 147.50 and 148.00 is holding the pair within a tight range. This consolidation follows the sharp drop on August 1st, leading traders to be cautious. The market seems content to remain within these boundaries, respecting these significant option levels. The primary tension over the coming weeks will be the wide interest rate gap versus the risk of intervention. Last week, Japanese officials warned about “excessive volatility,” effectively capping the pair below 148.50. However, with US 10-year yields remaining stable above 4.5%, the case for a significantly lower USD/JPY is weak. This suggests that strategies selling volatility, like iron condors with strikes outside the 146.50-148.50 range, could be profitable. This approach profits from the current stalemate, where fundamental pressures prevent a collapse, but official threats keep a major breakout in check. This is very different from late 2022 when fears of intervention led to huge one-way moves and extreme volatility. Create your live VT Markets account and start trading now.

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