• US President Donald Trump says interim accord with Iran to end war is "over", adding he didn't want to engage with Tehran

• The comments saw a knee-jerk reaction lower in EUR/USD 1.1427-1.1402 (EBS)

• Hedging flows relating to huge FX option strike expiries at 1.1400-05 can help limit downside

• FX option 1-month implied volatility up from 2026 low at 4.9 Tues to 5.2 since latest strikes on Iran and 5.3 post Trump comments

• 1-month expiry risk reversals increase downside over upside strike premium to 0.45 Wed from 0.35 Tues - wary of deeper FX declines

• A close below 1.1335 - 38.2% Fibo of 1.0125-1.2084 slide remains key to deeper declines below post June Fed and 1-year low 1.1325
EUR/USD daily chart (EBS)


EUR/USD 25 delta risk reversals


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