FxWirePro: AUD/USD bulls seem to be exhausted, downtrend to resume – vega spreads to deal higher IV

The long term trend on this pair has been downtrend, this has still been evident on monthly chart as we can observe that from current price on monthly that has still been fragile to fall below moving average curve.

To substantiate this view the RSI (14) on daily chart has reached above 70 levels which is now signaling overbought pressure. RSI's downwards convergence with massive price dips signifies bulls seem to be exhausted with their rallies. While %D line crossover in overbought territory on slow stochastic curve is also evidencing clear selling pressures. Overall, the major trend has been downtrend dominated by the bears with clear volume confirmation.

And in addition, as you can make out from the diagram the implied volatility for near month at the money contracts of AUDUSD pair has been highest among G20 currency segment and is seen at 11.8-12% levels for 1m expiry.

Considering the above aspects we recommend deploying one touch binary puts in our strategy in order to extract leverage on extended profitability. By employing 2w At-The-Money vega puts one can multiply returns by twice, thrice or even pour returns exponentially. But do remember these are exclusively for speculative basis.

The prime merits of such one touch option are high yields during high volatility plays. Wider spreads indicates lack of liquidity. The spreads for one touch AUD/USD options are constant time and barrier levels. Usually, such binary options for every change in 1 pip the relative change in option price 0.01% or even exponential at high implied volatility times. You can see that in charts how every dips would propel Vega effects.