Euro: EUR/USD risk reversal long setup – TD Securities
TD Securities' Macro Research Insight recommends going long EUR/USD via a three-month zero-cost risk reversal, buying a 1.1610-strike call and selling a 1.11-strike put.
TD Securities Macro Research Insight suggests implementing a long EUR/USD position through a three-month zero-cost risk reversal. This involves purchasing a 1.1610-strike call option while simultaneously selling a 1.11-strike put option. The strategy aims to capitalize on a potential rebound in the EUR/USD exchange rate, which has been trading at year-to-date lows.
Key catalysts for this outlook include the September month-end rebalancing and softer-than-expected US payrolls. The outlook aligns with TD's bullish year-end EUR/USD forecast, which anticipates a USD rally consolidating. Despite the current EUR/USD price near the year-to-date low, the source believes fading the EUR/USD selloff is a viable strategy.
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