FxWirePro: NZD/USD short term uptrend to end sooner, downtrend to resume with HY vols

On 13th August, short term uptrend was anticipated that has now started showing strength back again in this pair, four consecutive days in a row the kiwi dollar gained 110 pips against USD. It may continue until this weekend and then longterm trend to resume back to its business.

So, we recommend on speculation basis buying one touch binary at the money vega calls in order to extract maximum leverage on extended profitability. By employing these binary vega calls one can expect 15-20 pips gains and upbeat the implied volatility. But do remember this call is strictly on speculative grounds.

The prime merits of such one touch option spreads are high yields during high volatility plays, in this case it is observed as 15.82%. Wider spreads indicates lack of liquidity. The spreads for one touch USD/CAD options are constant time and barrier levels. Usually, such binary options for every change in 1 pip the relative change in option price 0.01% or even exponential at high implied volatility times. We all know that the major driving force for loony's depreciation has been dropping global crude prices.

Today's US CPI and FOMC minutes did not help US dollar anything much and the building permits and housing strats was not that encouraging and did not play a significant role in setting up of next stage for dollar but cannot afford jump into conclusion of dollar's losing sentiments at the moment. We believe one touch Vega spreads can be the best suitable options to trade HY vols at this stage.