NZD/USD rebound approaches 0.5600 despite bearish options market signals
NZD/USD licks its wounds near the lowest levels since March 2020, printing mild gains around 0.5570 while snapping a three-day downtrend during Tuesday’s session.
In doing so, the Kiwi pair ignores the bearish signals flashed by the options market traders, via the Risk Reversal (RR).
That said, the one-month RR of the NZD/USD pair, the key options market gauge, dropped for the fourth consecutive day on Monday, to -0.085 at the latest. It’s worth noting that the RR is the difference between the call options and the put options and hence indicates the market’s bias.
It should be observed that the daily RR of -0.085 also reverses the positive weekly RR flashed in the last and keeps the bears hopeful.
However, the return of the full markets and the traders’ preparations for this week’s key events seem to have triggered the corrective bounce of the Kiwi pair.
Also read: NZD/USD Price Analysis: Bulls eye 0.5580s
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
