EUR/USD risk reversals hit 4-week low

The decline in the EUR/USD from the recent high of 1.1961 has weakened demand for the EUR calls, shows the one-month 25 delta risk reversals gauge.

Risk reversals

• The risk reversals gauge fell to 0.10; the lowest level since Nov. 14. The drop from the Nov. 27 high of 0.55 clearly indicates the falling demand for the bullish bets (EUR calls).
• The risk reversals could turn negative, highlighting the rise in demand for EUR Puts, if the spot closes below the 50-day MA support of 1.1758.