Gold’s rallies have been eventful trading sessions in the recent past to wrap-up 2018 (almost over 4.77% spike in the last month), gold price in the major trend has gone into the consolidation phase.
Technically, the major trend resume consolidation phase after the formation of hammer patterns at the double top neckline (refer monthly plotting). As a result, the current price on this timeframe, has spiked above EMAs with most likely bullish crossover. Both RSI and stochastic curves, also converge upwards to the upswings.
Bullish neutral risk reversals are observed in gold’s OTC hedging market, while positively skewed IVs of 2m XAUUSD options have been stretched out on either side.
This is interpreted as the mounting hedgers’ bids for OTM calls options.
Well, on hedging grounds, keeping topsy-turvy underlying sentiment under consideration, XAUSUD ATM straddles are advocated, while the strategy comprises of at the money +0.51 delta call and at the money -0.49 delta put options of 1m tenors at net debit with a view of arresting potential FX risks on either side.
On trading perspective, bidding bullish neutral risk reversals, buying (1%) in the money gold call options are advocated, an in the money call with a very strong delta would move in tandem with the underlying XAUUSD move.
Currency Strength Index: FxWirePro's hourly USD spot index is inching towards 37 levels (which is bullish), while articulating (at 05:38 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex


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