EUR/USD: options markets stay doubtful of the upside
CME Group’s flash data for Tuesday for the 6EU7 contract expiring on August 4th noted OTM (‘out of the money’) Puts increased by 167 contracts vs. an increment of 367 contracts in OTM Calls. The activity in OTM Calls was focused mainly in the 1.1650 and 1.1700 strike prices (+222 contracts and +82 contracts, respectively).
Increasing activity in OTM Calls might suggest that traders could be now looking to cash up part of the recent strong upside, allowing some correction lower. The underlying bullish near term trend, however, should remain unchanged.
Activity in ITM (‘in the money’) Calls and Puts stayed non-relevant instead, with the Put/Call ratio staying put at 0.99 vs. the previous day.
Potential leg lower ahead?
Although spot has finally broken above the critical 1.1450 resistance area, recent activity in the options markets begs some caution for new buyers jumping in the upside train. A potential knee-jerk could find initial support in the 10-day sma in the 1.1400 neighbourhood.