EUR/JPY risk reversals - bearish bias strengthens

Risk reversals show a rise in demand for Puts.
Adds credence to bearish EUR/JPY price action.

Omkar Godbole FXStreet Contributor

The one-month 25 delta risk reversal fell to -0.75; the lowest level since Nov. 27.

It indicates increased demand for bearish bets on EUR (put options).
Also, it validates the argument that the pair has topped out 136.64 and the short-term trend has turned bearish.

As of writing, EUR/JPY is trading at 133.31. A break below 133.00 (support of the trendline sloping upwards from Nov. 23 low and Dec. 15 low) could yield further losses towards 132.05 (Dec. 15 low).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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