FxWirePro Short Term Outlook: Sell euro, buy pound, targeting 0.85 area

Our long call in EUR/GBP is still active, which was given out quite long ago. We recommended buying Euro against the pound at 0.76, targeting 0.94. The pair reached as high as 0.922 and currently trading at 0.9. So, our readers are at a plus 1400 pips. While this call remains active, we expect the pair retrace some of its gains and we suspect the pound to gather some momentum against the euro.

In a separate call (short term) we suggested going short on the pound at 1.29, targeting 1.2 area. The pound dropped to as low as 1.184 in a flash crash and hence that call reached the target. So we suspect the pound to gain some ground after reaching the target or consolidate here. On the other hand, we suspect that the euro is yet to discount all the risks associated within its borders, such as banking crisis and more importantly uncertainties surrounding the French and German election, which are due next year. There are possibilities of major turns in these two elections that could cloud the outlook for the European Union and the Eurozone.

The euro has started to show weakness against the dollar and we believe that could weaken the bullish outlook in EUR/GBP.

Trade idea –

Hence, we recommend going short but only in short term at a current level of 0.9, targeting 0.85 with a stop loss around 0.92 area.