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Free AccessEUR/GBP Bounce Alleviates Oversold Condition
- Day's gradual pullback in GBP/USD continues into NY Hours, with spot printing new daily lows at 1.2378. No meaningful support seen until the May 25 low at 1.2308 and the 100-dma of 1.2303, with option interest sitting just below the spot price for today's NY cut at $1.2375 (Gbp300mln set to roll off).
- The bounce in EURGBP also helping press GBP toward the bottom-end of the G10 pile despite still steady expectations for further BoE rate rises: BoE-dated OIS has nudged higher, with terminal policy rate pricing now at 5.48%.
- We wrote last week that EUR/GBP had entered technically oversold territory - today's bounce has helped alleviate that condition, putting the 14d RSI back above 30.
- GBPUSD is seeing healthy FX hedging volumes, with downside protection helping buoy overall options notional. Just under $3 in puts have traded for every $2 in calls, with 1.21 and 1.22 strikes seeing early interest.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.