NZD/USD fades the corrective pullback from a five-week low, marked the previous day, as it eases from the intraday high of 0.6182 during Tuesday’s Asian session. In doing so, the Kiwi pair justifies the bearish signals flashed by the options market traders, via the Risk Reversal (RR).

That said, the one-month RR of the NZD/USD pair, the key options market gauge, dropped to the lowest level in a week by the end of Monday’s North American session. It’s worth noting that the RR is the difference between the call options and the put options and hence indicates the market’s bias.

With the latest daily RR of -0.125, the options market gauge dropped for the second consecutive day. Further, the weekly RR marked the biggest slump in two months with a -0.420 figure.

The options market traders are bearish mainly as the Reserve Bank of New Zealand (RBNZ) cited economic woes while the hawkish Fed bets remain intact despite the recession woes.

Also read: NZD/USD weighed by a risk-off start to the week