FX Market Update provides a quantitative overview of the currency market, including several valuation tools and monitors.
Looking at the signals from our short-term financial models, we currently observe significant misalignments in AUD/USD and AUD/CAD, which trade 1.9 and 1.5 standard deviations respectively below our model's estimate.
We remain bearish on AUD on a six- to 12-month horizon but taking the bullish signals from our short-term fair value models into account, we would consider to take advantage of the past week's increase in implied volatility, the negative skew and the positive carry by selling 1M 0.9400 AUD/USD put option.
EUR/NOK also trades with a significant 1.9 standard deviation above our short-term model estimate. Although both carry and the option smile make risk reversal an attractive strategy to position for corrections lower in EUR/NOK, we would be careful entering one to two-month short EUR/NOK positions as the NOK liquidity situation could worsen again in December.
To Read the Entire Report Please Click on the pdf File Below.
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AUD/USD Oversold: Where To Sell
Published 11/08/2013, 05:41 AM
Updated 05/14/2017, 06:45 AM
AUD/USD Oversold: Where To Sell
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Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
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