- AUD/USD risk reversals continue to slide on put demand.
- Risk reversals fell to -1.275 – the lowest level since early May 2017.
The value of the AUD put options (bearish bets) continues to rise, meaning the investors are expecting the Australia currency to slide further in the near-term.
The AUD/USD one-month 25 delta risk reversals (AUD1MRR) fell to -1.275 today – the lowest level since early May 2017. A week ago, the risk reversals stood at -0.75.
The sharp rise in the implied volatility premium for the AUD puts as represented by the decline in the risk reversals from -0.75 to -1.275 indicates the options market has turned bearish on the AUD over the last one week.
This should not come as a surprise as the AUD/USD pair suffered a downside break of pennant last Thursday, opening the doors to 0.70 (psychological support).
AUD1MRR
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