20 Mar 2015
Entering a EUR/USD 2M 1.04-1.00 Put spread – Nomura
FXStreet (Barcelona) - FX strategists at Nomura, view that EUR/USD’s downside will likely be driven by fixed income outflows from the Eurozone, and hence enter into a put spread for the pair, targeting 1.00-1.04 levels within two months.
Key Quotes
“After less than 24 hours, we have retraced almost the entire (partly crazy) move from yesterday in EURUSD. Hence, the downside trend remains in play, likely driven by the underlying fixed income outflows from the Eurozone.”
“But the speed of the move down from here may be slowed by the new signal from the Fed.”
“Against this background, we are restructuring existing downside EURUSD options into put spreads with less ambitious strikes. Specifically, we are now targeting a move into the 1.00-1.04 range within two months, expressed through EUR put/USD call spreads (at the same time, we are closing out near-term EURUSD one-touches with 1.00 and 0.95 strikes).”
Key Quotes
“After less than 24 hours, we have retraced almost the entire (partly crazy) move from yesterday in EURUSD. Hence, the downside trend remains in play, likely driven by the underlying fixed income outflows from the Eurozone.”
“But the speed of the move down from here may be slowed by the new signal from the Fed.”
“Against this background, we are restructuring existing downside EURUSD options into put spreads with less ambitious strikes. Specifically, we are now targeting a move into the 1.00-1.04 range within two months, expressed through EUR put/USD call spreads (at the same time, we are closing out near-term EURUSD one-touches with 1.00 and 0.95 strikes).”