GBP/USD ignores downbeat options market signals to aim for 1.2350 retest

GBP/USD picks up bids to reverse intraday losses, defending the previous day’s bounce off one-week low heading into Wednesday’s London open. Even so, the Cable pair remains down for the fourth consecutive day around 1.2325 by the press time.

That said, the options market signals seem to underpin the broadly bearish bias surrounding the GBP/USD pair, even if failing to support the latest rebound.

As a result, the options market indicator, namely the Risk Reversal (RR) prints a two-week and two-day losing streaks with the latest numbers being -0.070 and -0.040 on a weekly and daily basis. Alternatively, the monthly RR printed a 0.430 figures for January, marking the fourth consecutive positive number.

It should be noted that the RR is the difference between the call options and put options and generally directs the Cable price.

Talking about the quote’s latest inaction, the same could be linked to the cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting. Even so, downbeat UK inflation expectations and housing statistics keep the GBP/USD bears hopeful.

Also read: GBP/USD: Downbeat UK inflation expectations, housing data supersede Brexit news above 1.2300, Fed eyed