New RBNZ Governor Anna Breman Aims to Restore Stability After Tumultuous Years 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
US Gas Market Poised for Supercycle: Bernstein Analysts 
Urban studies: Doing research when every city is different 
2025 Market Outlook: Key January Events to Watch 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
Fed Meeting Sparks Division as Markets Brace for Possible Rate Cut 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
BOJ Faces Pressure for Clarity, but Neutral Rate Estimates Likely to Stay Vague 
ECB’s Mario Draghi’s press conference yesterday did not help the euro. European central bank’s President modestly seemed too pessimistic for that: growth and inflation forecasts revised down, warnings of global risks. On the other hand, he could have sounded even more dovish. New long-term tenders do not seem to be an immediate issue. The ECB’s rhetoric was sufficient to ensure that the official announcement of QE measures ending was not seen as a hawkish signal by anyone. With such a skilful communicator at its helm the ECB does not need to take any strong material actions to achieve what it wants. Although yesterday’s press conference did not constitute a negative signal for the EUR exchange rates in the long run, some pressures could be foreseen.
On a broader perspective, we view EURUSD at 1.12-1.08 as a major support region and the ideal area for a long-term higher low over the 1.0340 lows set in 2016. Notable supports within this region lie at 1.1190 and 1.1000.
FX Derivatives Strategy: Options Strips
Combination ratio: (2:1)
Rationale: EURUSD skews have been well-balanced on either side that signifies hedgers interest in both OTM put and OTM call options.
Contemplating above fundamental factors and the RRs for positive bids in the near-term and bearish technical environment (in long-term) and most importantly, the positively skewed IVs in the sensitivity tool coupled with bearish risk reversal numbers indicate more biased towards downside risks.
The execution: Initiate long in 2 lots of EURUSD at the money -0.49 delta put options of 2M tenors, go long 1m at the money +0.51 delta call option simultaneously.
The strategy can be executed at net debit with a view to arresting FX risks on both sides and likely to derive exponential returns but with more potential on the downside.
Alternatively, shorting futures of mid-month tenors are advocated with a view of arresting further potential slumps. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.
Currency Strength Index: FxWirePro's hourly EUR spot index is inching towards -63 levels (which is bearish), while hourly USD spot index was at 79 (bullish) while articulating (at 11:54 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
