EUR/USD option expiries steer focus toward the New York cut

Only a couple of key expiry levels bear watching today, set out in bold below.

They are on EUR/USD at 1.1350 and 1.1400, putting the strikes within 15-35 pips of the current spot price. The €4.5 billion expiry at 1.1400 stands out most. It is exceptionally large and almost sitting on top of spot, and 1.1400 is also an obvious psychological level.

Adding to that, the 100-hour moving average is currently at 1.1404. That will add a key near-term technical resistance layer that keeps price action capped closer to the 1.1400 region in the session ahead.

With that in mind, the expiry at the figure level could exert a gravitational pull on EUR/USD toward 1.1400 heading into the cut, especially if the broader dollar backdrop stays steadier today.

The bond market remains the key external driver of trading sentiment. As Treasury yields continue to climb, with the 10-year at 5.21% now, that could produce a firmer backdrop for the dollar as the new week gets going.

In turn, that could pressure EUR/USD and draw in the expiries at 1.1350, possibly limiting some of the downside price action in the session ahead.

There are no other major expiries to watch today besides the EUR/USD ones. The 1.1400 expiry is the main magnet to watch, with 1.1350 and 1.1420 potentially helping to contain price action going into the cut.

But as mentioned, the more influential and stronger driver of dollar sentiment right now is arguably the bond market. So how yields behave to start the week will also have a big say on dollar price action in European trading later.