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23 Jan 2015
AUD should be the next domino – SG
FXStreet (Barcelona) - The Research Team at Societe Generale, feels that the AUD/USD break below the 2010 low at 0.8060-70 has paved way for further fall.
Key Quotes
“The AUD has remained range-bound since mid-December. After the EUR, GBP, NOK, CHF, and lastly CAD, the AUD outlier should be the next domino to fall this year. Breaking 0.8060-70 (the 2010 low) would prove a significant bearish signal as negative fundamentals are already paving the way.”
“AUD/USD implied vol is trading significantly above the realised volatility, reflecting option market fears of downside as risks. Selling this large premium is therefore appropriate via topside strikes. Setting a downside KO slightly discounts the received premium.”
“Sell AUD/USD 3M call strike 0.84, KO 0.79. Indicative bid: 0.45% (vs 0.62% for the vanilla, spot ref: 0.8105)”
Key Quotes
“The AUD has remained range-bound since mid-December. After the EUR, GBP, NOK, CHF, and lastly CAD, the AUD outlier should be the next domino to fall this year. Breaking 0.8060-70 (the 2010 low) would prove a significant bearish signal as negative fundamentals are already paving the way.”
“AUD/USD implied vol is trading significantly above the realised volatility, reflecting option market fears of downside as risks. Selling this large premium is therefore appropriate via topside strikes. Setting a downside KO slightly discounts the received premium.”
“Sell AUD/USD 3M call strike 0.84, KO 0.79. Indicative bid: 0.45% (vs 0.62% for the vanilla, spot ref: 0.8105)”