FxWirePro: Open interest in GBP contracts increase, GBP/CAD can’t be spared from gaining on Super Thursday

Change in open interest for British pounds is seen at 6622 which is highest among all OTC contracts out of which o/s calls were 4153 and puts were 2469. While delta reversal for the same contracts have been slightly negative for next 6 months to 1 year.

Technical watch:

We stated yesterday that it would be projected as swings may head towards an intermediate correction since bearish candle patterns occurred on both daily and weekly charts. Please have look what happened on this pair today. This is not a miracle but a sheer research. On daily charts shooting star, hanging man and gravestone doji have formed on peaks at 2.0499, 2.0522 and 2.0538 levels respectively.

Divergence of leading oscillator (RSI) is traced out when prices were rallying at peaks, this would be also treated as the price is attempting to take halt and correct for some time.

We've also seen %D line crossover on slow stochastic above 80 levels which is overbought region. We look ahead at price to test the support at 2.0420 (this week's lows) if it has to bounce back.

But for the traders who are risk averse, the spreads using one touch GBPCAD vega options are recommended which are constant time and barrier levels. Usually, such binary options for every change in 1 pip the relative change in option price 0.01% or even exponential at high implied volatility times.

We believe one touch Vega spreads can be the best suitable options to trade HY vols. The prime merits of such one touch option spreads are high yields during high volatility plays. Wider spreads indicates lack of liquidity.