FOREX MARKET IMPLIED VOLATILITY – TALKING POINTS
- GBPUSD overnight implied volatility remains at its highest level since November 2018 while British Pound currency traders anxiously await Brexit clarity
- USDCAD overnight implied volatility is also elevated ahead of Canada’s release of its latest GDP reading
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Brexit remains in limbo after the latest developments from British Parliament and leaves the situation more clouded than ever. Consequently, forex options traders are pricing 17.4 percent implied volatility on overnight GBPUSD contracts due to the exceptional degree uncertainty.
FOREX MARKET IMPLIED VOLATILITIES AND TRADING RANGES
After Prime Minister Theresa May offered to resign in exchange for MP support over her Brexit Withdrawal Agreement, Parliament showed how divided British politicians remain over the UK’s departure from the EU with all 8 motions suggesting alternative Brexit paths failing to gain majority backing. It now appears that the House of Commons will hold a third meaningful vote over the PM’s Brexit deal tomorrow at 2:30 PM London time which increasingly seems like the only viable option left for the UK unless MPs plan on pulling out of the EU with no deal.
Also, USDCAD overnight implied volatility also looks relatively elevated with Canadian GDP numbers expected to cross the wires at 12:30 GMT tomorrow. Strong correlation between the Canadian Dollar and oil prices could also be factoring into USDCAD’s uptick in implied volatility following US President Trump’s latest criticism of OPEC supply cuts and high oil prices. Additionally, other market-moving economic data on deck like US inflation could cause the currency pair to gyrate.
FOREX ECONOMIC CALENDAR – GBP, CAD, USD
Visit the DailyFX Economic Calendar for a comprehensive list of upcoming economic events and data releases affecting the global markets.
GBPUSD TRADER CLIENT SENTIMENT
Check out IG’s Client Sentiment here for more detail on the bullish and bearish biases of EURUSD, GBPUSD, USDJPY, Gold, Bitcoin and S&P500.
GBPUSD client positioning data from IG shows that 65.8 percent of traders are net-long with the ratio of traders long to short at 1.92 to 1. The bullish bias of GBPUSD traders has grown recently with the number of traders net-long 26.5 percent higher than yesterday and 17.1 percent higher than last week.
USDCAD TRADER CLIENT SENTIMENT
USDCAD client positioning data from IG shows that 39.0 percent of traders are net-long with the ratio of traders short to long at -1.57 to 1. The bearish bias of USDCAD traders has grown recently with the number of traders net-long 9.5 percent lower than yesterday and 7.3 percent lower than last week.
- Written by Rich Dvorak, Junior Analyst for DailyFX
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