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Expiry Pipeline Looks to Keep Lid on EUR/USD

EUR
  • A tighter option expiry pipeline for EUR/USD this week could keep the lid on intraday volatility headed through the prelim PMI data due on Friday morning.
  • Sizeable strikes at $1.1000(E3.1bln) and $1.1050(E4.7bln) across the Tuesday - Friday NY cuts make up the bulk of option focus for this week, and could provide some pre-May ECB decision calm for the currency amid a continued split of the ECB governing council for the trajectory of interest rates.
  • The focus for EUR/USD is on 1.1127, a Fibonacci projection and 1.1185 further out, the Mar 31 2022 high. On the downside, key short-term support lies at the 20-day EMA, at 1.0879.
  • Speeches last week outlined a diversity of views among ECB policymakers, with the market-implied peak ECB rate now below 3.75%, inline with Wunsch's speech last week, that eyed peak rates at 3.50-4.00%.
  • Lagarde is set to speak later today in New York, but Wednesday, Friday could prove more illustrative, with no fewer than 12 ECB speeches scheduled, as well as the March meeting minutes.

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