Last week, European Central Bank (ECB), delivered biggest disappointment in terms of additional stimulus, by just delivering only 10 basis points rate cut and six months extension of current asset purchase program. Market was immediately caught off-guard, pushing Euro 3% high against Dollar, year end.
Despite massive blow to relative monetary policy divergence, we at FxWirePro maintaining out medium to longer term outlook for Euro/Pound. We called for sell Euro against Pound at 0.702 area and at rallies, while keeping stop loss around 0.75 area and targeting 0.62 area, with some interim targets. Despite that trade being in red, we expect it to prevail over time.
Now in the short term even, we expect there are opportunities selling Euro against pound, for those not willing to take the sizable risk and big stop loss in hunt for greater reward.
Trade idea
Sell Euro against Pound at current rate 0.723, with stop loss around 0.728 area and target around 0.704.
