GBP/USD: Risk reversals point to completion of Head & Shoulders

GBP/USD risk reversals indicate the options market is taking this US dollar rebound seriously and is preparing for the downside.

Risk Reversals

The one-month 25-delta risk reversal gauge fell to -0.675; the lowest level since June 23. The negative print indicates increased demand for Puts.

The options market could be preparing for a drop to the head and shoulders neckline support of 1.2789 levels.