June 16, 2022 - 01:02 PM 245 views
GBP/USD maintains its post-Fed advances while picking up bids in the direction of the recent peak at 1.2200, which was close to 1.2185 by the end of Thursday's Asian session.
Option market signals support the cable pair's recent rise, in addition to the broad US dollar loss following the US Federal Reserve's (Fed) move.
By the close of Wednesday's North American session, the GBP/USD pair's one-month risk reversal (RR), which is a spread between calls and puts, had jumped the most in five weeks, with the latest RR number being +0.265. The options market signal has so broken the preceding three-day downturn.
The weekly picture, however, remains in favour of the GBP/USD bearish, as the week-on-week RR prints a three-week downtrend while also flashing the most negative readings since late April, hovering around -0.620 at press time.
Traders may wait for the Bank of England's (BOE) monetary policy announcement to take additional positions, given the short-term bullish bias for the GBP/USD pair, in contrast to broader bearish projections.
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