EUR/GBP: Buy short-term dips, sell medium-term rallies
I also do not like uncertainty, just like most traders, and a Scottisk vote to leave the UK would certainly introduce a huge level of uncertainty into the value of the GBP on FX markets. We have 10 days to go before the vote and we are likely to see some large swings dependent on poll results. I’m siding with the high street bookies, who are still firmly of the opinion that the end result will see Scotland remaining in the UK and the bookies usually get it right.
So, EUR/GBP is fundamentally bearish and overvalued in my view, so I expect this pair to fall heavily later in the year once the result of the referendum is confirmed. Until that point, I will sell any significant rallies but I’m also willing to buy short-term dips as the GBP longs in the market will be nervous. In other words, a great pair to be trading.