[B]My picks:[/B] Pending Short EUR/GBP
[B]Expertise:[/B] Fundamentals and Technicals
[B]Average Time Frame of Trades:[/B] 2 - 10 Days
The EUR/GBP tipped lower from the previous week to hold below the 20-Day moving average, and looks to be testing 0.8490-0.8500 (61.8% Fib of 0.7694-0.9805) for short-term support however, as the Shadow European Central Bank calls upon the Governing Council to lower the benchmark interest rate further in an effort to stem the downside risks for growth and inflation, speculation for a rate cut could weigh on the exchange rate going forward. As the ECB is scheduled to meet this week, the central bank is likely to hold dovish policy stance as economic activity falters, and may take additional steps to shore up the economy as growth and inflation falter. At the same time, Credit Sussie overnight index swaps show investors anticipate the Bank of England to tighten policy over the next 12 months, and long-term expectations for higher interest rates in the U.K. favors a bullish bias for the British pound. As a result, I will wait for a retracement before attempting to sell the pair, and have set a short entry at 0.8540, the 6/19 high, and placed the target at 0.8449, the 6/15 low, with the stop at 0.8570, the 6/24 low.
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