USD/CAD: Risk reversal braces for strongest run-up since March

One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, is on the way to posting third weekly advance, the longest uptrend in four months, according to data source Reuters. 

A call option gives the holder the right but not obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell. That said, the weekly difference between them jumped to +0.162 by the end of Thursday’s trading session, per Reuters.

The moves could be linked to the USD/CAD price performance that also prints a three-week uptrend, despite recently easing from a three-month high to 1.2573.

Given the lack of major data/events from Canada, the Loonie pair is likely to keep the uptrend but US data and risk catalysts, not to forget oil moves, will be the key to follow.

Read: USD/CAD Price Analysis: Bulls on the verge of a fresh hourly impulse