Saudi riyal showing strengths of gains against USD amid increased foreign reserves

The economic and local policies are showing more generosity by the prince Mohammed Bin Salman and created an instrumental economic and defense councils to tackle Houthi rebels and their allies in Yemen.

The oil industry started showing some sort of strength as Brent crude has recovered some of its losses by posting 15% gains this year. As a result 90% of government's revenue has been evidenced from the income from oil exports.

But the expectations of the budget deficit to widen to 14.5% of gross domestic product this year, compared with a gap of 1.9 percent in 2014. The king's handouts are likely to boost domestic consumption, supporting non-oil economic growth. This has hindered the Saudi's currency as US oil extractions are in improved mood.

Technical Watch:

We could sense some bearish momentum on USDSAR as Gravestone Doji candle pattern occurred on daily chart confirmed with the next candle to the downside. RSI (14) implicates a convergence as the price curve moving stagnant.

Derivatives call:

Considering the near term bearish trend on this pair (USDSAR), we would like to advocate "Bull put spread." 
In order to execute this strategy, sell ITM put option and buy another OTM put option (lower strike price) of the same expiration date for net premium receivable.Use this strategy if the underlying currency is expected to shift upper or sideways so that put expires worthless and you keep the entire premium. Keeping shorter expiration period for time decay is advisable here.