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:
-
In the same area as the short-term (50-day) average at £0.86.
-
100 pips below the medium-term (100-day) at £0.87.
-
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.
Author
Gavin Pearson
Independent Analyst
Gavin Pearson of Jeepson Trading is a currencies speculator from the UK focused on the G7 economies and is a recognized member of the eToro Popular Investor Program as well as being a funded prop trader with The 5%ers.
