USD/CAD: Value of CAD puts hits 7-week high

• The USD/CAD one-month 25 delta (CAD1MRR) risk reversals hit 7-week highs on CAD put demand.
• The uptick in the risk reversals adds credence to the bullish technical breakout in the USD/CAD.

The USD/CAD risk reversals gauge rose to 0.25 yesterday - the highest level since July 20, having bottomed out 0.08 on Aug. 28.

The uptick represents a steady rise in demand or implied volatility premium for the CAD put options (bearish bets). It also indicates the investors are likely expecting a deeper drop in the CAD.

After all, the bullish falling channel breakout witnessed on Sep. 4 signaled a revival of the rally from the April 17 low of 1.2527.

CAD1MRR