AUD/USD - Risk reversals at 5-week high, Vols at 3-month lows

AUD/USD options data shows falling demand for Put options and a sharp drop in the implied volatility.

Risk reversals & volatility

• The one-month 25-delta risk reversal (green line) has jumped to -0.60; the highest level since Sept. 14.
• The one-month at the money option volatility dropped to 7.32; its lowest level since mid July.

AUD/USD - Bid tone to strengthen

The uptick in the risk reversal suggests falling demand for Put options (bearish bets). Meanwhile, the drop in the volatility is usually accompanied by a rise in the underlying.

Thus, Aussie dollar may continue its slow rise to 50-day moving average level of 0.7903.