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