EUR/USD: Options market turns most bullish in a week ahead of ECB, US GDP
|One-month risk reversal (RR) of the EUR/USD, a gauge of calls to puts, prints +0.050 readings for Wednesday, per the latest data from Reuters.
The figures suggest that the pair traders are the most bullish since October 19 when the RR marked +0.0932 level. It’s worth noting that the positive RR level also consolidates the previous day’s negative prints of -0.063.
However, the EUR/USD pair’s latest price action refrains from portraying the bullish bias, down 0.06% intraday around 1.1600.
The quote’s latest moves could be linked to the US Dollar’s pick-up tracking the US Treasury yields. The US 10-year Treasury yields gain two basis points (bps) to regain 1.55% after dropping the most since mid-August the previous day. The consolidation of the US Treasury yields portrays the market’s rush for risk-safety ahead of the preliminary US Q3 GDP and monetary policy meeting of the European Central Bank (ECB).
The US Q3 GDP is expected to have eased from 6.7% to 2.7% during the preliminary forecast, which in turn may allow the Fed to take some time before announcing the details for tapering.
Read: US Third Quarter GDP Preview: A most uncertain estimate
On the contrary, the ECB is likely to portray a hawkish play but there are reasons for the Euro (EUR) bulls to consider before eyeing the EUR/USD run-up.
Read: European Central Bank Preview: Finally, some action, but no hopes for the EUR
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.