About two weeks ago I wrote about some frenetic activity in the interbank option market where there was significant cover being bought in the form of 89 cent calls when the spot market was trading at 83 or 84 cents. The speculative market was short, on a risk-averse ride, but starting to feel a little unsure. I’m hearing today that should the spot market break above 89 cents then we are likely to see more heavy buying from the options market and as we are entering the generally ‘thin’ summer markets, levels such as this will tend to act like a magnet. Last Friday I would have discounted the chances of the AUD/USD trading to 91 or 92 cents anytime soon but now I’m not at all so sure.
Fron an intraday perspective, we can expect to see trailing stops emerge above the recent hourly highs at .8780.