GBP/USD leans bullish towards 1.2200 on upbeat options market signals, BOE eyed
GBP/USD holds onto the post-Fed gains while picking up bids towards the recent peak surrounding 1.2200, close to 1.2185 by the press time of Thursday’s Asian session.
In addition to the broad US dollar weakness after the US Federal Reserve’s (Fed) action, options market signals also back the cable pair’s latest strength.
That said, a one-month risk reversal (RR) of the GBP/USD pair, a spread between the calls and the puts, jumps the most in five weeks by the end of Wednesday’s North American session, with the latest RR figure being +0.265. In doing so, the options market signal snap the previous three-day downtrend.
It’s worth noting, however, that the weekly scenario remains in favor of the GBP/USD bears as the week-on-week RR prints a three-week downtrend while also flashing the most negative figures since late April, around -0.620 by the press time.
Given the short-term bullish bias for the GBP/USD pair, in contrast to a bit broader bearish forecasts, the traders may wait for the Bank of England’s (BOE) monetary policy decision for taking fresh positions.
Read: BOE Preview: Why GBP/USD set to suffer even in response to a 50 bps hike, a lose-lose event