FXWW News/GBP crosses

Switching long cable into short EUR/GBP position

I’m still of the view that cable will bottom out sometime soon but whether that’s at 1.5600 or 1.5450, I really cannot tell. EUR/USD looks terrible and with the ECB flagging more easing measures, the downside pressure is only going to increase. I missed the boat on Friday afternoon and we are now significantly lower, so selling EUR on the crosses looks like a better proposition.

EUR/CHF is another variable, and as the pressure on the 1.2000 floor increases, so also will the SNB sales of EUR/GBP, EUR/JPY etc as they sanitise their purchases.

I’m switching from a long cable to a short EUR/GBP position, keeping my stops well above .8050 for now and with an open downside target. If this pair accelerates lower, we could see a very quick 5% move.

  1. EUR versus various pairs looks over extended to me. I wouldn’t be surprised to see a reasonable bounce before further selling emerges. I won’t be buying it, but mindful of a snap back rally for re-entry.

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