Forex options risk reversals show distinct risk that the US Dollar may slip further against the Euro, Australian Dollar and New Zealand Dollar through short-term trade. Indeed, traders have begun to aggressively bet on and hedge against further Euro strength via options, and recently one-sided speculative futures positioning shows distinct risk of near-term corrections.

Forex options market volatility expectations have dropped noticeably through the past week’s trade, pointing to slower price moves in the week ahead. Yet recently-volatile financial markets emphasize that traders should always prepare for the unexpected, and the especially-volatile situation surrounding Greece and the broader Euro Zone could force substantial daily price swings. We will continue to favor our price-following Momentum and Breakout trading systems, as we believe they offer superior risk-reward compared to the Range trading signals. Though there is distinct risk of being chopped out in rangebound markets, potential gains outweigh potential risk with momentum-style trading.

Forex options market volatility expectations have surged on recent market choppiness, and we have geared up for substantial moves out of the US Dollar and other key counterparts. We continue to favor Breakout systems, and indeed the Breakout2 Trading Signals system has been a top performer through recent price action. It first went heavily net-long the US Dollar and Japanese Yen on their initial recoveries, but the USD reversal led it to close several long positions. It remains heavily long the Japanese Yen, however. There is distinct risk that the fast-moving system will be chopped out, but elevated volatility expectations plainly favor further big moves.

Forex options market volatility expectations have surged on recent market choppiness, and we have geared up for substantial moves out of the US Dollar and other key counterparts. We continue to favor Breakout systems, and indeed the Breakout2 Trading Signals system has been a top performer through recent price action. It first went heavily net-long the US Dollar and Japanese Yen on their initial recoveries, and the system has more recently flipped directions and is now mostly short USD. There is distinct risk that the fast-moving system will be chopped out, but elevated volatility expectations favor further big moves.