The new trading week has opened with the USD slightly stronger compared to last weeks levels. There is speculation that the Federal Reserve decision on interest rates on Wednesday will remain the same with no change expected. Tuesday has the release of PPI which could give insight into the inflation picture. Volatilities are calm and stable as the market is in a holding pattern until the Federal Reserve meeting.
Option volatilities are slightly lower this week. Risk reversals still favor upside strikes, particularly in EUR. The 1 month 25 delta risk reversal continues favoring EUR calls as they trade at a vol premium of 0.0%/0.20% over EUR puts. USD puts are also favored versus the JPY with a vol premium of 0.6%/0.8% for USD puts over USD calls with regards to USD/JPY.
OPTION TRADE IDEAS
Below please find some strategies, which depending on your view might be applicable. Please bear in mind that all of these trades can be applied to any of the currency pairs, which may be traded. All barrier levels, strikes, triggers, payouts, and maturity dates can be tailored to each individuals views.
