#EURUSD @ 1.07423 could reach 1.09 as optimism is continuing to build in the FX options market – ING
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EUR/USD remains gently bid. The pair is set to test resistance at 1.0785 and potentially 1.09, economists at ING report.
“Measures such as the risk reversal – the cost of a 25 delta EUR/USD call option versus a similar EUR/USD put option – continue to move in favour of EUR/USD upside.”
“As recently as October, the markets were prepared to pay 2% extra in volatility terms for a 3-month 25 delta EUR/USD put option. That skew for Euro puts has now narrowed to 0.67%. The skew turning positive – in favour of EUR/USD calls – would be a big moment for the FX market.”
“The seemingly benign investment environment (despite the horrors in Ukraine) probably has investors wanting to buy EUR/USD on dips.”
“Today’s EUR/USD bias looks towards resistance at 1.0785 and potentially towards the 1.09 area tomorrow, should the US CPI release oblige.”
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