FxWirePro: USD/TRY bulls resume at 7-EMAs, ‘debit call spread’ to hedge upside risks

USDTRY major uptrend bounces back at 7-EMA levels after 3-black crow pattern.

While strong support is seen at 5.1587 levels, while RSI shows gaining strength at 62 levels.

7-EMA is observed at 5.2960 and 21-EMA is 4.7297 levels.

Trade tips: 3m USDTRY debit call spreads are advocated with a view to arresting upside risks. Initiate 3m 5.30/6.54 call spreads at net debit. Thereby, one achieves hedging objective as the deep in the money call option with a very strong delta will move in tandem with the underlying spikes.

The rationale for the trading: Please observe that the above technical chart is also clearly indicating the further upside risks. 

It seems that hedgers of TRY are well-balanced on either side with the above fundamental factors. 

IVs of this underlying pair is on the higher side, trending highest among the G20 FX space. Call options with a higher IVs cost more, because, increasing IV is desirable for the holder of the option, just for the intuition that the higher likelihood of the market ‘swinging’ in holder’s favor. Please also be noted short-dated options are less sensitive to IV, while long-dated is more sensitive. Courtesy: Sentry & Tradingview.com

Currency Strength Index: FxWirePro's hourly USD spot index is flashing -51 (which is bearish), at press time 13:24 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex