Technical Analysis:
EURUSD is overall bullish and price is trying to retrace down to 4H order block or FVG from where we might get a MSS again to the upside. We can look for buying opportunities around 1.11500-1.11100.
Fundamentals:
FX options have been positioning for a weaker USD as expectations of Fed easing gathered pace and some currency pairs appear more fearful than others about an extended USD decline.
A UK holiday dampened incentive and trade flows on Monday, but there has been demand and increased volatility premium for options including impending NFP data after Fed chair Powell's comments on Friday.
EUR/USD implied volatility gained amid the recent EUR/USD rally through various topside barriers to reach 1.1201 on Friday (matched Monday). Benchmark 1-month expiry 25 delta risk reversals traded their highest topside over downside strike premium since late 2020 at 0.4 on Monday - reflecting the risk of more topside potential if EUR/USD can break more key barriers.
Disclaimer: Trading carries risk. Practice effective risk management and consider your risk tolerance before trading.
