FX option expiries for 22 October 10am New York cut
There are a couple of key expiry levels to take note of on the day, as highlighted in bold below.
The first one is for EUR/USD at the 1.1200 level, with the strike some 40 pips away from the spot price. The expiries could be relevant for nearby price action, especially if the euro comes under renewed selling pressure. But with the dollar also trading more choppily this week, things can work both ways. And while not immediately highlighted, the expiries at 1.1300 could also come into play if we do see EUR/USD nudge higher in the session ahead. For now though, that concentration should not exert much immediate influence.
In short, the pair is sort of caught in the middle and the influence of the expiries will depend on the directional move in the session ahead. The ones at 1.1200 are still arguably more relevant and could attract some hedging flows in keeping EUR/USD above the figure level going into the cut.
Meanwhile, there are quite a numbe of large ones in focus for USD/JPY. The $1.7 billion expiry at 157.50 stands out as the most immediate consideration, sitting just 5 pips away from spot. And then there’s a layer just underneath that with the $1.1 billion expiry at 157.35. That cluster could very well keep price action anchored around the expiry levels ahead of the cut. However, I would argue that the technical consideration is worth just as much and if not more for USD/JPY at this stage.
The pair has repeatedly failed to get above the 200-day moving average of 158.53 and a firm break below swing region support around 157.50 could easily open up a can of worms in sending price lower towards 157.00 next. As such, that could draw in the expiries at that level to have some influence if we do see a continued push lower.
For now, dollar sentiment remains key and it’s mostly tied to how things are playing out with the bond market. Treasury yields are back on retreat but market sentimet remains heavily mixed with US futures also pointing lower as tech shares come under pressure. Tesla’s earnings call in particular was not met with a good reception as shares were down nearly 5% in after hours trading.
As such, there will be more pertinent and bigger drivers affecting price action today than just the expiries. So, just keep that in mind as well.
For more information on how to use this data, you may refer to this post here and/or refer to the Q&A below.
