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FxWirePro: Trend projection of EUR/CHF through delta risk reversal and ATM volatility

As we can make out from the volatilities of EURCHF ATM contracts, it is comparatively lower side over next 6 months tenor and delta risk reversal suggests that hedging downside risks are more expensive as the premiums of puts have been comparatively costlier with calls. The negative delta risk reversal persists over next one year divulges that the expectation of weakness in next future.

So we think the premiums on put options would be highly costlier regardless of swings in short run, on speculating grounds one can get benefitted from such situations by buying one touch binary vega calls on every dips to operate as a swings trading in order to extract leverage on extended profits.

More importantly, the pair is perceived to have 2nd least ATM volatility among the major pool, we can observe these effects in weekly charts as the momentum is remained well within the Bollinger bands despite bearish various candles piling up. For intraday trading it is advisable to buy binary call options for targets of 15-20 pips as leading oscillators are positively converging to boost up buying interest.

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