EUR/USD Options - Investors seek downside protection
|- EUR/USD moved above 1.22 on Friday despite strong US data.
- Open interest in EUR/USD Puts (bearish bets) rises.
EUR/USD jumped more than 170 pips on Friday to a high of 1.2219 despite the upbeat US December core inflation and retail sales figure.
The monthly technical chart indicates the currency pair could rise further to 1.2431 (monthly 200-MA) in the next few weeks. Still, investors are likely worried of a potential pullback in the EUR/USD pair as indicated by the rise in the open interest/open positions in the EUR/USD put options.
The data for the EUR/USD Feb expiry options published by the CME show-
- Open interest in the put options increased by 402 contracts on Friday. 1.2250 strike put added 347 contracts.
- Meanwhile, the open interest in calls fell by 161 contracts.
The open interest activity clearly indicates the investors are seeking downside protection against long EUR/USD positions.
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