As discussed above, USD calls have become extremely cheap and we recommend expressing our bearish EURUSD view by buying the 3-month 25-delta risk reversal (buying the put with a strike of 1.0584, selling the call with a strike of 1.1389, spot reference: 1.0964) for 11bp. Our technical strategist is also bearish EURUSD and looks for selling interest near 1.1050 to cap near-term upticks. A move below support in the 1.0810 area would confirm a top under the 1.1470 range highs and signal further downside traction. His initial targets are towards 1.0675 and then the 1.0460 year-to-date lows. His greater downside targets are in the 1.0200 area
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