EUR/USD freight train: 25-delta Risk reversal favor further gains

Omkar Godbole FXStreet Contributor

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.

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	High
1H	Bullish	Overbought	Low
4H	Slightly Bullish	Neutral	High
1D	Slightly Bullish	Overbought	Shrinking
1W	Bullish	Overbought	Expanding
Updated Jul 21, 02:30 GMT

Author

Omkar Godbole

FXStreet Contributor

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

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.