GBP/USD Options: Open Positions In Calls Rise For The Second Day

The GBP/USD extended the three-day winning streak Thursday, but has failed to take out 1.3268 (38.2% Fib retracement of 1.3657-1.3027).

On the daily charts, this rejection at the 38.2% Fib indicates bullish exhaustion, given the 10-day moving average is still sloping downwards.

However, options market indicates any dip is likely to be short-lived and the spot could revisit 1.34-1.35 soon.

The preliminary data published by the CME shows the open interest/open positions in the Calls options rose by a big number for the second day on Wednesday.

• Open positions in call options increased by 1003 contracts yesterday. That takes the total additions in Calls over the last two trading days to 2378 contracts.
• On the other hand, the open positions in Puts increased by 456 contracts, which takes the total additions in Puts over the previous two trading days to 844 contracts.

The bias is clearly bullish.

OI change

Source: CME

• On Tuesday, the 1.34 Strike Call added 900 contracts, while on Wednesday the 1.35 Strike Call added 952 contracts.

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• The dip to 1.3180-1.32 is likely to be short-lived.
• The spot is more likely to take out 1.3268 (38.2% Fib R of 1.3657-1.3027) and test at least 1.3417 (61.8% Fib R of 1.3657-1.3027) over the next few weeks.