GBP/USD: Options market turns most bullish in a week ahead of BOE

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GBP/USD pares the biggest daily gains since April 2021, defending the 1.2600 threshold during Thursday’s Asian session, as cable traders await the Bank of England (BOE) monetary policy decision.

Read: BOE Preview: A 25 bps rate hike can’t save GBP bulls amid economic gloom

In doing so, the quote ignores the bullish bias of the options market, as portrayed by the one-month risk reversal (RR). That said, the gauge of calls to puts prints the week’s biggest daily figure, worth 0.287, while showcasing the positive expectations from the GBP/USD. Not only that but the weekly RR is also up for the heaviest run-up in three with a 0.212 level and keeps the buyers hopeful.

It’s worth noting, however, that the market’s expectations from the BOE are more than what the “Old Lady” has already announced, which in turn could trigger the GBP/USD pair’s pullback in case the British central bank disappoints bulls.