GBP/USD: Risk reversal rises the most in three weeks amid pre-Fed anxiety

One-month risk reversal (RR) of GBP/USD, a gauge of calls to puts, not only reversed the previous day’s downside but also printed the biggest daily figures since January 05 by the end of Tuesday’s North American session.

In doing so, the RR prints 0.075 level, following the -0.238 numbers marked the previous day.

It should be noted, however, that the weekly RR print signals that the bears are in control. That said, the RR drops for the third consecutive week so far, with the latest figures of -0.163 being the lowest since the week ended on November 12.

Although the options market data suggests that the GBP/USD buyers are taking risks on the key Fed day, the pair prices struggle to keep the bounce off the lowest levels since January 03, marked the previous day.

The reason could be linked to cautious sentiment ahead of the US Federal Reserve (Fed) meeting joins geopolitical risks emanating from Russia and Omicron woes in Japan, not to forget downbeat economic forecasts by the International Monetary Fund (IMF).

Read: GBP/USD Price Analysis: Bulls packing a punch through 1.35 the figure, 1.3580 eyed