EUR/USD freight train: 25-delta Risk reversal favor further gains
|Thursday’s press conference was one of those rare occasions when the ECB President Draghi failed to talk down the Euro. As KBC Bank says, “Even the not surprising suggestion that policy would be reviewed in the months ahead prompted FX markets to push the Euro higher against other major currencies.”
EUR/USD jumped to a two-year high of 1.1659 before ending the day at 1.1630. The currency pair is mildly bid in Asia around 1.1634 levels. The spot may look overbought as per the 14-day RSI, but the one-month 25 delta risk reversal suggests there is not stopping the EUR freight train.
The uptick in the 25 delta risk reversal (more demand for call options) adds credence the bullish break in the EUR/USD pair above 1.16 handle and indicates that any pullback is likely to be short lived.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.