AUD/USD put value jumps to 15.5-month high

  • AUD/USD put value has hit 15.5-month highs today, indicating the investors are expecting a deeper drop in the AUD/USD.
  • The data adds credence to the pennant breakdown seen in the daily chart.

The AUD/USD one-month 25 delta risk reversals fell to -1.3 today - the lowest level since May 5, 2017 -  vs the recent high of -0.8 registered on Aug. 8.

The decline from -0.8 to -1.3 represents a rising demand or rising implied volatility premium for the AUD put options (bearish bets).

It seems safe to say that investors are expecting a deeper drop in the Aussie, as indicated by the pennant breakdown in the daily chart, and hence are preparing (hedging) for the same via long put positions.

AUD1MRR

Daily chart

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 securities. 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 Forex 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.