Pound traders betting that the UK and the EU are bluffing in their latest Brexit dispute are set for a windfall if history repeats itself. Options to position for sterling gains have now become relatively cheap, as most investors are rushing the other way to hedge against a decline in case Britain fails to agree a trade deal with the bloc this year.
RSI is also showing an overbought euro, as traders hedge their bets in case the talks collapse before October 15. The Euro has steadily gained during September breaking the previous resistance of 0.9175 against sterling, but stopping short of pre-pandemic levels to retract just above 92 pence.
