GBP/USD tracks options market signals to snap four-week uptrend

GBP/USD takes offers to refresh intraday low near 1.2380 amid the first loss-making day heading into Friday’s London open. In doing so, the Cable pair not only justifies the broadly firmer US Dollar but also traces the options market signals as it braces for the first negative week in five. That said, one-month Risk Reversal (RR) of the GBP/USD, a gauge of the difference between the call options and put options, prints the biggest weekly fall since November 18, 2022, while marking -0.160 figures at the latest. It’s worth noting, however, that the daily RR prints the strongest figure in over a week, to +0.025, as traders remain cautious ahead of the Federal Reserve’s (Fed) favorite inflation number, namely the US Core Personal Consumption Expenditures (PCE) – Price Index for December, expected to remain unchanged at 0.2% MoM. In addition to the options market signal and pre-data anxiety, downbeat catalysts from the UK also weigh on the GBP/USD prices of late. Also read: GBP/USD retreats to 1.2400 as Fed vs. BoE drama looms, US PCE inflation in the spotlight

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