This time last year, the FX futures market was reducing EUR longs. More recently, EUR positioning is very small, Société Generale FX strategists note

Risk reversals to return towards flattish levels

“EUR/USD’s acceleration above 1.10 over the past couple of weeks has pushed up both realised and implied volatility.”

“As the FX skew usually predicts more volatility on the USD upside, the switch to positive of short-dated EUR/USD risk reversals is an inversion.”

“This move is consistent with the positive vol/spot correlation, but as the spot stabilises, we’d expect risk reversals to return towards flattish levels.”