GBP/USD Options: Investors boost bullish bets on sideways breach of the rising trend line

Omkar Godbole FXStreet Contributor

After having clocked an intraday high/low of 1.2919/1.231, the GBP/USD pair ended on a flat note on Friday at 1.2871. The resulting Doji candle also marked a sideways breach of the key rising trend line.

Daily chart

The sideways breach of the rising trend line indicates indecision. The Doji candle only corroborates the view that sellers are reluctant in exploring levels below the trend line support.

Investors boost bullish bets

Source: CME

The data published by the CME for GBP/USD Sep expiry options show a big jump [+631 contracts] in the open interest [OI] in the Call options on Friday as opposed to miniscule additions [+94 contracts] in the Put options OI.
1.28 Call added 250 contracts and 1.3050 Call added 214 contracts. Meanwhile, In-The-Money [ITM] Put [1.2950] witnessed a reduction of 78 contracts.

View

The bullish bias in the options market adds credence to the argument that a sideways breach of the rising trend line signals bearish exhaustion.
Thus, doors are opened for re-test of the resistance zone of 1.2960-1.30 levels.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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