EUR/USD: Puts in demand ahead of Draghi's speech

The EUR/USD risk reversals indicate rising demand for EUR puts.
Escalating trade tensions favor further downside in EUR/USD.
Markets look to ECB forum in Portugal for rates clues.

Omkar Godbole FXStreet Contributor

The EUR/USD one-month 25 delta risk reversals fell to -1.05 today - the lowest level since May 30, indicating a rising implied volatility premium (rising demand) for the EUR puts (sell EUR). The risk reversals gauge stood at -0.23 on June 7.

The options market data indicates the investors are likely hedging/seeking downside protection against a deeper sell-off in the EUR/USD pair. As of writing, the spot is trading at 1.1642.

The common currency could revisit post-ECB low of 1.1543 and could possibly break below the recent low of 1.1510 on escalating US-China trade tensions and political uncertainty in Germany. Also, bears may hit the market with fresh offers if the ECB President Mario Draghi reiterates dovish end the central bank's QE program. The central bank chief will deliver introductory speech ECB Forum on central banking today.

EUR/USD Technical Levels

Resistance: 1.1645 (5-day moving average), 1.1687 (20-day moving average), 1.1852 (Thursday's high).

Support: 1.1618 (session low), 1.1543 (post-ECB low), 1.1510 (May 29 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M		Overbought	Shrinking
1H	Bearish	Neutral	Shrinking
4H	Bullish	Neutral	Low
1D	Bearish	Neutral	Expanding
1W	Strongly Bearish	Oversold	Expanding
Updated Jun 19, 03:30 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 retakes 1.1800 on renewed USD weakness

EUR/USD gains ground after three days of losses, re-attempting 1.1800in the European trading hours on Thursday. The US Dollar sees fresh selling interest across the board, despite hawkish Fed Minutes, as the market mood improves and supports the pair. US Jobless Claims data, Fedspeak and geopolitics remain in focus.

GBP/USD recovers above 1.3500 amid better mood

GBP/USD finds fresh demand and rises back above 1.3500 in the European session on Thursday. Improving risk sentiment and renewed US Dollar weakness are helping the pair recover ground ahead of mid-tier US data releases and Fedspeak.

Gold clings to gains above $5,000 amid safe-haven flows and Fed rate cut bets

Gold sticks to modest intraday gains, above the $5,000 psychological mark, through the first half of the European session, though it lacks bullish conviction amid mixed cues. The third round of US-mediated negotiations between Ukraine and Russia concluded in Geneva on Wednesday without any major breakthrough.

Injective token surges over 13% following the approval of the mainnet upgrade proposal

Injective price rallies over 13% on Thursday after the network confirmed the approval of its IIP-619 proposal. The green light for the mainnet upgrade has boosted traders’ sentiment, as the upgrade aims to scale Injective’s real-time Ethereum Virtual Machine architecture and enhance its capabilities to support next-generation payments. The technical outlook suggests further gains if INJ breaks above key resistance.

Hawkish Fed minutes and a market finding its footing

It was green across the board for US Stock market indexes at the close on Wednesday, with most S&P 500 names ending higher, adding 38 points (0.6%) to 6,881 overall. At the GICS sector level, energy led gains, followed by technology and consumer discretionary, while utilities and real estate posted the largest losses.