EUR/USD options markets: the idea of a pullback gathers traction

Pablo Piovano FXStreet

According to CME Group’s preliminary data for the 6EU7 contract with expiration date on August 4, OTM (‘out of the money’) Puts rose by 1,989 contracts mainly in the 1.1600 strike price (+1,068 contracts), while OTM Calls rose by 2,174 contracts, mostly in the 1.1850 and 1.1800 strike prices (+1,202 contracts and +985 contracts, respectively)

ITM (‘in the money’) activity showed Puts increasing by 445 contracts and Calls dropping by 87 contracts.

The Put/Call ratio ticked higher to 1.04.

EUR/USD stays bullish, with caution

Yesterday’s price action in EUR/USD saw a test of fresh 2-year tops beyond 1.1710, although the upside momentum faded just pips away from the critical level at 1.1713 (August 2015 high) and it closed below 1.1650.

The daily move signaled a strong presence of sellers beyond 1.1700, implying the rally maybe entering some exhaustion and opening the door at the same time for a pullback.

However, the raise of nearly 2.2K contracts in OTM Calls vs. the drop of ITM Calls begs some caution, as market participants seem to have shifted their view towards the downside.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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