EUR/USD risk reversals retrace put bias

• EUR/USD risk reversals show falling demand for put options.
• Risk reversals add credence to the corrective rally seen in the EUR/USD spot.

Currently, the EUR/USD one month 25 delta risk reversals gauge stands at -0.575 vs -1.05 on May 30.

The rise from -0.575 to -1.05 represents a drop in the implied volatility premium for the EUR puts or falling demand for the EUR puts (bearish bet).

The improvement in risk reversals indicates the investors likely believe the EUR/USD has bottomed out at least for the short-term and hence the demand for the bearish bets has dropped.

As of writing, the EUR/USD is trading at 1.1689 vs the recent low of 1.1510. Despite the corrective rally, the break above 1.17 remains elusive.

EUR/USD 1MRR