FxWirePro: Speculate EUR/GBP with futures, hedge with put spreads

German's ZEW sentiment index negative numbers today have set the tone sending yields lower, unless a Greek solution presents itself.

ZEW index disappointed the streets by flashing at 31.5 which is a way below forecasts at 37.5.

Thursday is the next Greek make-or-break date.

On the flip side, UK CPI inflation picked up at 0.1% YoY prints from previous -0.1% in April which is in line with forecasts.

PPI outputs printed at 0.1% which is in sync with streets forecasts.

UK CPI key drivers -

Rising oil prices

The wage rates pressure due to improved the labour market.

We see opportunities to short futures contracts for targets of 88 pips towards downside on every upswing.

On hedging front Buy (0.5%) In-The-Money -0.57 delta Put options of EUR/GBP and simultaneously sell 2 lots of (0.5%) Out-Of-The-Money puts with positive theta value.