• Hawkish Fed/USD gains sent EUR/USD to 1.1418 before recovering 1.1481 Fri, but slips back to 1.1442 Monday

• Key support at 1.1409 - March 16 low since Aug 2025, when it based 1.1392. Option barriers expected 1.1400

• 1.1335 is 38.2% Fibo retrace of 2025-2026 rise from 1.0125 to 1.2084 and a viable downside target for EUR/USD bears

• EUR/USD option risk reversals warned of downside risks to spot before Fed - highest EUR put vs call premium since April

• The benchmark 1-month 25 delta contract retains that 0.65 premium for EUR puts over calls

• Outright demand for downside pre Fed has increased since - strikes as low as 1.1200 with 3-6-month expiries

• Implied volatility increasing as EUR/USD edges lower - benchmark 1-month expiry now 5.7 from recent/2026 lows 4.9
EUR/USD daily chart (EBS)


EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


(Richard Pace is a Reuters market analyst. The views expressed are his own)