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  • EUR/USD three-month risk reversals show bullish (call) bias is strongest in 22 months.  
  • The options market turned bullish on the common currency earlier this month.  

EUR/USD three-month risk reversals (EUR3MRR), a gauge of calls to puts on the common currency, rose to the highest level since January 2018 on Friday, indicating investors are adding bets to position for an uptick in the EUR.  

Three-month risk reversals jumped to 0.225 – a level last seen in the second half of January 2018.  

The positive number indicates the implied volatility premium or demand for the EUR call options (bullish bets) is higher than that for the EUR puts (bearish bets).  

The gauge turned positive earlier this month and has witnessed a near 90-degree rise from -0.375 seen on Nov. 13.  

While risk reversals are pointing to bullish bias, EUR/USD is looking heavy, having failed repeatedly failed in the last four days to convincingly scale key Fibonacci retracement of 1.1082.