There aren’t any major key expiry levels that are of immediate influence today, with the full list seen below.
The two larger ones for EUR/USD and USD/CAD at 1.1210 and 1.4150 respectively are the closer expiries to be wary of, although they are still some distance away with the strikes holding 40-60 pips away from the spot price. As such, the influence of the expiries are not going to all too impactful provided we see the dollar pull back more modestly in the session ahead.
After the hotter-than-expected US CPI report overnight, the focus remains on the dollar side of the equation after having seen 10-year Treasury yields shoot back up to 5%. The broader risk mood was more sour yesterday too but we are seeing US futures recover some poise today in the early stages.
Then again, just be reminded that it is a partial US market holiday with the bond market out of action in the day ahead. So, that will keep things a bit trickier in the sessions to follow amid thinner liquidity conditions especially during US trading later.
As such, traders will be without one of the key gauges of broader market sentiment amid the absence of the US bond market later today. That could mean that any big moves might be exacerbated by thinner flows rather than any real conviction. And we as traders will not be able to say for certain which is which, before normal trading resumes tomorrow.
So, be careful out there. The same goes for the dollar as well, so just be mindful on how any pick up in the broader risk mood might be reflected in the currency without the bond market backing that up yet today.
In any case, the lack of any major expiries just means that traders will be left to fend for themselves in trying to work out the above conundrum in 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.
