EUR/GBP trade plan: Sell rallies from the 0.87 area
|When comparing the outlook of the Euro and the Pound, it has been identified that the EUR/GBP may depreciate over the short term. This is anticipated as a result of investors seeking the higher rates that the Bank of England will need to maintain in order to combat sticky inflation.
Technical evaluation
The EUR/GBP is currently trading in the £0.86 area which is:
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In the same area as the short-term (50-day) average at £0.86.
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100 pips below the medium-term (100-day) at £0.87.
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100 pips above the long-term (200-day) average at £0.87.
Research suggests that the value of the EUR/GBP at this time is to stay below the £0.87 area which would coincide with the downtrend break zone which is at the 50% Fib.
EUR/GBP trade plan
The EUR/GBP trade plan is to sell from the 0.87 area with stop loss above 0.88 and profits to be considered in the 0.85 area.
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