There are just a couple of key expiry levels to take note of on the day, as highlighted in bold below.
The first is for EUR/USD at the 1.1100 level, which sits around 30 pips from the spot price. As things stand, the pair is still holding on to support closer to the 14 October low of 1.1111 for now. So, that will be the more immediate key downside level to watch. However, the expiries will add a secondary layer for sellers to chew through in trying to secure the next leg lower.
So if price momentum continues to favour a softer EUR/USD, just be wary that the expiries at 1.1100 may be a factor in holding price action from running too far, too fast in the session ahead. That is provided we don’t see too much else happening in markets as traders continue to digest the Fed decision and the mix of big tech earnings from overnight.
Besides that, there is one for USD/CAD at the 1.3965 level with the strike holding within 30 pips of the spot price. The expiries here could provide a magnetic pull towards the level, especially if the pair struggles to sustain a move above 1.4000. The 23 October low around 1.3968 will also keep the expiry level in focus in adding to another layer for sellers to chew through in trying to establish a firmer downside leg below the 1.4000 mark to end the week.
But in the bigger picture, traders are still very much focused on what to make of the Fed decision yesterday while weighing the broader risk mood as tech shares look to be shaken up from Alphabet’s poor earnings performance. Meanwhile, the bond market also continues to sit on edge with 10-year Treasury yields at 5.00% on the day. So, that is also keeping traders in a more cautious spot awaiting the US PCE inflation data next.
Outside of the expiries, those will be the more influential drivers of trading sentiment for the day ahead.
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.
