EUR crosses/FXWW News/GBP crosses

EUR/GBP: Shorts preferred for .7870 test

I prefer this pair in the short-term to others like EUR/CAD and EUR/AUD for the simple reason that cable has moved to some degree alongside the EUR/USD whilst AUD/USD and USD/CAD have moved slightly counter the main market trend. Hope that makes sense, but to an old cross trader like me, EUR/AUD and EUR/CAD feel a bit oversold in the short-term. I will wait on these and look for any intraday rallies to get short.

EUR/GBP on the other hand looks very heavy. If cable can reverse some of its earlier losses then we should easily see a test of recent cross lows at .7870 and even more, should that level break. I’m looking for EUR/USD to fall below 1.2850 and cable to recover back towards 1.6450, which would suggest the cross will then be trading near .7800.

Sounds like a plan at least, let’s see if it’s a good one!

  1. Hi Sean, do you think the rout of cable is overdone? No doubt USD is surging but the bulk of the recent slide in sentiment for cable is due to the Scottish referendum which looks overblown? The UK economy is still trotting along very well and BOE seems most likely to raise its rates before the Fed. Once the referendum blows over after 18, do you reckon cable to move back towards 1.66/68?if so, what level do you think is a good long entry or line in the sand for cable? Thanks.

  2. I think so Ray, but it’s also prudent to be cautious with the EUR/USD in freefall. I’m watching 1.6270/80 today and if that holds first-up, then buying with a tightish stop targeting 16450 makes sense to me.

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