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.

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