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Refinitiv
Jul 20 - 03:55 AM

GBP/USD - Demise Thwarted By Big Option Barriers - For Now

By Richard Pace  —  Jul 20 - 02:34 AM
  • Cable broke, closed below 200-dma 1.3700 Monday, 1.3655 low (1.3659 Tues)

  • Touted 1.3650 option barriers and related defence stem GBP decline, for now

  • Level below Mar/Apr lows, not traded 1.3650 since Feb, next barriers 1.3600

  • Option implied volatility is higher - benchmark 1-month paid 7.2 in Asia

  • 1-month was 6.1 on Thursday, crisis lows 5.7 in June, so decent gains

  • Risk reversals show the vol premium for GBP puts (downside) has increased

  • Options reflect GBP downside fears and increased volatility risk



For more click on FXBUZ


GBP=D3 Click here

Source:
Refinitiv IFR Research/Market Commentary

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