FX Options Insights 06/08/24
Significant EUR/USD options may hold the market. Monday saw a peak of 1.1009 EUR/USD, which finished at 1.0952. Tuesday's market was offered as volatility somewhat decreased. Option expiries worth EUR 21 billion could be contained for the remainder of the week. Strikes range from 1.0775 to 1.0975, with heavier deals falling below the going rate. With Thursday's New Cut, 1.0840's EUR 4.1 billion will roll off 1.0850-60 strikes, which are also significant that day and total EUR 3 billion.
Forex traders need to exercise caution. August is traditionally when the AUD/USD falls, and this year is probably going to be no different, especially if global equities continue to decline. The August performance of the AUD/USD exchange rate since 2000 has declined in 18 of the previous 24 years, including 2021, 2022, and 2023, according to an analysis. While seasonality should not be taken into account on its own, it can be a helpful tool when paired with other elements. Tuesday saw a rise in global stocks, partially undoing the sharp drop of the day before. Since money typically leaves the Australian dollar during uncertain times, a fresh sell-off in global equities would be dependent on the AUD/USD exchange rate.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!