The USD/CNH one month 25 delta risk reversals (CNH1MRR) are currently trading at -0.117 – the lowest level since April 19.
The negative print indicates that the implied volatility premium or demand for USD/CNY puts (bearish bets) is higher than that for calls (bullish bets).
Notably, risk reversals turned negative earlier this year for the first time since April, meaning the options market has turned bearish on USD/CNY (bullish on CNH) after eight months.
The increasing demand for put options validates the bearish view put forward by the USD/CNH technicals.
CNH1MRR