Sell EUR/GBP for target of 0.8665 - Westpac
|The research team at Westpac recommends to sell EUR/GBP cross with the following parameters
“Entry: 100% at 0.8810, Stop: 0.8870*, Target: 0.8665”
Key Quotes
“Rationale:
- GBP has been sold on the back of the increased political uncertainty generated by the weakened Conservative govt. after last week's election as well as post-election surveys of uncertainty
- The Bank of England is likely to continue its highly accommodative policies when it meets this week, but the context of a resilient economy will continue and a likely point of discussion within the MPC and the threshold for withdrawing accommodation is relatively low according to recent minutes
- Both housing and inflation data this week surprised on the upside and will pressure the covering of GBP shorts if BoE maintain a more balanced stance
- Govt./DUP agreement is likely soon together with the likelihood of more business friendly Brexit negotiations and a dropping of contentious manifesto initiatives”
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