NZD/USD risk reversals & vols - Short-term bottom in place?

• Slight improvement in risk reversals and a drop in volatility indicates pair may have found a bottom
• NZD/USD peeped above 0.69 handle

The one-month 25 delta risk reversals improved to -1.075 this week from Friday's 7-1/2 low of -1.075. While a negative reading shows bearish bias (demand for Puts), still the improvement indicates the bears may have run out of steam for now.

Meanwhile, the one-month at the money (ATM) volatility dropped from the recent high of 9.35 to 9.095 on Tuesday.  The decline in volatility also adds credence to the argument that the sell-off in the spot may have ended. Moreover, volatility picks up during the sell-off in the underlying and vice versa.

NZD/USD pair currently trades at 0.6895 levels, having clocked a high/low of 0.6914 and 0.6838, respecitvely.