FX Quant Insight: Getting closer to breaking ranges

Research evidence excerpt

FX Quant Insight: Getting closer to breaking ranges

more volatile markets (Exhibit 2, Exhibit 3, For a complete list of our open trades and

Exhibit 4). With US data outperforming and the risk of the FED hiking suddenly feeling trades closed in the last 12 months, please

very real, our bias remains bullish USD (Liquid Insight, 13 May ‘26). see Global FX weekly: Breaking bonds 15

May 2026

Bearish GBPUSD

We closed our short GBPUSD trade last week as its main catalyst (a rise in political and

fiscal uncertainty following the May local elections) is now largely behind us (FX Alpha,

14 May ‘26). However, our bias and quant signals remain bearish GBP. Option flow and

skew has moved drastically in favor of GBP puts last week (Exhibit 2), and a bearish Glossary:

continuation signal has been triggered by our event analysis framework (Exhibit 4). CARS (model): Cross-Asset Regime

Moreover, GBPUSD has broken below its lower Bollinger band, which we interpret as a Switching

bearish trend indicator for the pair (Exhibit 5). SDR: Swap Data Repository

MAA: Moving Average Aggregator

From a macro perspective, we also lean bearish on the GBP near-term. Until we get

UD: Up/Down volatility

more clarity on who will be the UK’s prime minister after the political noise has faded,

and on the policy agenda of any successor, GBP will likely remain under pressure. The RS: Residual Skew

main risk to our bearish GBPUSD view is that the leadership challenge proves ADX: Average Directional Movement Index

unsuccessful or that de‑escalation in the Middle East weakens the USD. DMI: Directional Movement Index

SMA: Simple Moving Average

RV: relative value

Trading ideas and investment strategies discussed herein may give rise to significant risk and are