EUR/USD Options - Investors seek downside protection

• EUR/USD moved above 1.22 on Friday despite strong US data.
• Open interest in EUR/USD Puts (bearish bets) rises.

EUR/USD jumped more than 170 pips on Friday to a high of 1.2219 despite the upbeat US December core inflation and retail sales figure.

The monthly technical chart indicates the currency pair could rise further to 1.2431 (monthly 200-MA) in the next few weeks. Still, investors are likely worried of a potential pullback in the EUR/USD pair as indicated by the rise in the open interest/open positions in the EUR/USD put options.

The data for the EUR/USD Feb expiry options published by the CME show-

• Open interest in the put options increased by 402 contracts on Friday. 1.2250 strike put added 347 contracts.  
• Meanwhile, the open interest in calls fell by 161 contracts.

The open interest activity clearly indicates the investors are seeking downside protection against long EUR/USD positions.