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May 20 - 03:48 AM

EUR/USD - Options Say EUR/USD Bulls Shouldn't Get Too Excited

By Richard Pace  —  May 19 - 03:30 AM
  • EUR/USD options have reduced downside exposure and premiums nL1N2D109O

  • However, no rush for topside protection, and implied volatility stays low

  • Low implied volatility consistent with low actual volatility/range trading

  • Benchmark 1-month implied volatility is level with daily realised volatility

  • That shows fair value - once daily cash hedging will offset the option cost

  • Renewed implied volatility gains may signal change in current view

  • Break/close above big resistance probably needed 100-200dma's 1.0972-1.1016

  • Range binary type barriers also in the mix above 1.1000 to add resistance



EURUSD 1-month volatility Click here

EURUSD RISK REVERSALS Click here

Source:
Refinitiv IFR Research/Market Commentary

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