EUR/USD hit 5-week low, EUR bearish bias in the options market strengthens

• EUR/USD hit a 5-week low of 1.2218 on Thursday.
• EUR put bias strengthens, risk reversals indicate.

The EUR/USD pair fell to 1.2218 on Thursday - the lowest level since March 1.

The decline in the spot has strengthened the EUR put (sell EUR) bias. The one-month 25 delta risk reversals (EUR1MRR) are being paid at 0.20 EUR puts vs. 0.1 EUR calls on March 7. The rise in the implied volatility premium for EUR puts, as shown by the risk reversals, indicates investors expect a deeper pullback in EUR/USD. 

That said, the common currency has defended the key ascending trendline support, as seen on the daily chart below. 

EUR1MRR

EUR/USD daily chart