Trade ATM digital AUD/USD puts but call spreads for hedging

Glenn Stevens the RBA governor reveals below key elements in his speech today.

He confirms economy has not grown as per the expectation.

Glenn Stevens is open for further monetary easing in order to ensure sustainable growth, price stability, full employment and financial stability

On the flip side he also added the resultant force would not be achieved through lower interest rates, because rates are already lower.

Currency depreciation is unlikely to have adverse impact on inflation.

Technical & Currency Options Tips:

We expect the pair to evidence the bearish momentum in US sessions as %D line crossover on stochastic is signaling overbought scene for the day on intraday chart. But stay out of EOD positions until US retail sales data announcements which would likely to print positively and add fuel to bullish trend for US dollar.

So, it is recommended that fresh build-ups of long on binary ATM puts below 0.7678 spot levels.

However, after tomorrow's high impact news of retail activity, long near month call spreads are advocated on medium term perspective.

We think current ATM AUD/USD calls are fairly priced in as NPV & delta moving in with optimal option price. So wait until tomorrow and should be well enough to buy then.