EURUSD 3-month implied volatility fell below %5 for the first time since early 2020. Traders bet on tighter price range until key December ECB meeting. ECB members will decide what is next after the PEPP at that meeting. Calmer CPI from the US and weak jobs data are too calming the volatility expectations. The markets expecting FED will pass September and decide on November or December about tapering because of the weak data.
Risk reversals are still at the negative side but almost flat and close to zero except for 1-year RR. A possible rate increase by FED at the end of 2022 is pricing in for the 1-year RR. That means traders expect a weaker EURUSD in the second half of 2022.
The slightly bearish downtrend continues for EURUSD and if the middle line of the trend channel is taken into account, the price is at the low side. The middle line is close to 1.19 at the moment. EURUSD needs to pass the 1.19 resistance if a bullish wave to happen. Otherwise, the price may continue to move in the lower zone of the channel for a while (1.1620-1.19).