There are a couple of key expiry levels to take note of on the day, as highlighted in bold below.
The first ones are for EUR/USD and they are layered between the 1.1150 and 1.1200 levels, with the spot price sandwiching the expiries at the moment.
The larger expiries at the figure level could potentially act as a magnet for price action with the ones closer to 1.1175 potentially helping to anchor price action around the current levels at least. Meanwhile, the ones at 1.1150 could potentially add another layer of gravitational pull if sellers gain the upper hand in the session ahead.
But when taken together, these expiries could encourage more two-sided price action between 1.1150 and 1.1200 before rolling off later in the day – with the more immediate focus on 1.1175 to 1.1200 for now.
Then, there is one for USD/JPY at the 158.00 level although the strike is roughly 40 pips away from the spot price. Still, the expiries could act as a potential upside magnet if the dollar finds some support in European morning trade.
Lastly, there is one for AUD/USD at the 0.7025 level and that is more or less where the spot price is holding currently. The pair failed to push past its 200-day moving average around 0.7056 this week and is now caught just under the confluence of key daily moving averages around 0.7031-56.
The 200-hour moving average is then seen at 0.7023 and that is helping to limit near-term downside. So, the expiries will also add another layer of attraction in potetially keeping price action stickier in the session ahead.
All that being said, just be wary that month-end rebalancing flows and broader risk sentiment will also be key drivers to trading sentiment today. As such, any strong directional moves could easily overwhelm any option-related pinning effects on a day like this.
For more information on how to use this data, you may refer to this post here and/or refer to the Q&A below.
This article was written by Justin Low at investinglive.com.
