Big action in EURUSD and EURGBP – Forex options expiries 21 May 2018

Forex option expiries for the 10am (14.00 GMT) New York cut 21 May 2018

As mentioned on the live blog, and on these posts, there’s big barrier action in EURUSD at the 1.17 handle. It looks like we’ve seen the first defence of that with the bounce from the low of 1.1717 taking us to 1.1742. It’s going to be an interesting level to watch. What’s also being touted are further RKO’s down at 1.1650 & 1.1600. They may also be accompanied by normal barriers. One thing about these options plays is that there’s also gamma side to these trades. A break of 1.1700 would leave these options players short gamma, which effectively makes them long the underlying, and that could lead to them covering (selling) EURUSD on a break under 1.1700, and thus adding impetus to the break. It’s all showing that this level is big for a lot of reasons and that the reaction surrounding it could be more volatile than normal.

We’re also still playing with a DNT in USDCAD and today there’s particularly big expiries in EURGBP and AUDUSD. A fun day to kick the week off with eh?