EUR/GBP in consolidation mode
I’m still short of this pair and happy to stay that way. Obviously, based on the reaction to the ECB overnight, the short-term market was overly short EUR at the wrong levels and got caught out by some illiquid conditions. Nevertheless the fundamental view for the EUR heading into 2015 is bearish and my view that cable will base somewhere around 1.55 remains unchanged.
A quick look at the EUR/GBP daily chart shows broad consolidation between .7825/.8025 and I’m still strongly of the view that this will resolve itself in an aggressive bearish break to sub-.75 levels early next year.