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  • Writer's pictureanalysiswatch

Title: GBP/USD pares intraday losses near 1.0700 as options market signals test bears

September 28, 2022 02:26 AM ET

By: AnalysisWatch

GBP/USD posted gains in the early hours of European trading on Wednesday and managed to break away from its daily low and regain the 1.0700 level. As a result, currency traders are finding it difficult to justify overall U.S. dollar strength and domestic pessimism amid mixed concerns in the options market.

The one-month risk reversal (RR) for the British pound (GBP), a measure of the ratio of calls to puts, broke a two-day downtrend with a reading of 0.160, according to the latest Reuters data.

However, on a weekly basis, the options market barometer remains negative for the second consecutive week at -0.685, taking into account the weekly data from Reuters.

The positive value indicates that a higher premium (option price) is paid for call options than for put options or bearish bets.

In other words, the options market is siding with the bears after a sharp decline in recent days.

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