GBP/USD bounces off short-term support line to justify bullish options market
- GBP/USD extends recovery moves from two-week-old support line.
- Options market turns most bullish in five weeks.
- Normal RSI conditions favor buyers inside rising channel.
GBP/USD picks up bids to 1.4152, up 0.03% intraday, ahead of Monday’s London open. In doing so, the cable pair takes clues from the upbeat risk reversals to portray recovery moves from a short-term support line.
One-month risk reversal (RR) of GBP/USD jumps to +0.150 for the week ending on May 21, 2021, per data from Reuters.
The positive figures suggest call options (bullish) are surpass the put options (bearish). Also, the RR jumped the most since mid-April, which in turn backs the GBP/USD buyers inside a six-week-old rising channel bullish chart pattern.
Given the quote’s latest rebound, backed by normal RSI conditions, 1.4200 could return to the charts. However, any further upside needs to conquer the stated channel’s upper line, around 1.4260, to keep the bulls happy.
Meanwhile, a downside break of the stated support line near 1.4140 could target the 1.4100 round-figure before directing GBP/USD sellers toward the 1.4000 psychological magnet.
Though, the pair’s downside past 1.4000 should rebound from the stated channel’s support line, around 1.3955, if not then the monthly low of 1.3801 will become the bears’ favorite.
GBP/USD four-hour chart
Trend: Bullish
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
