GBP/USD: Options market snaps two-week downtrend

One-month risk reversals on the British pound (GBP), a gauge of calls to puts, rose for the first time in three weeks by the end of Friday’s trading.

Risk reversals jumped to +0.150 in favor of call or bullish bets according to the latest data provided by Reuters. The gauge flashed -0.063 and -0.187 figures during the previous two weeks.

The positive reading indicates call options are drawing a higher premium (option price) than calls or bullish bets. In other words, the options market regains upside momentum even as the UK suffers from the covid woes and the Bank of England (BOE) also sounded bearish in its latest appearance.

The risk reversal data seems to back the GBP/USD buyers by the press time as the quote picks up to the intraday top near 1.3900.

Also read…

Germany’s Merkel launches bid to ban all British travellers from EU – The Times 

GBP/JPY consolidates recent losses around 154.00 amid Brexit, covid drama 

GBP/USD Price Analysis: Bulls battle against gravity