Listen to the latest market mood for the EURGBP pair.

 

Strong EUR, Weak GBP

The GBP continues to look vulnerable medium term as the UK has still not arranged a trade deal with the EU. EU’s Chief Brexit Negotiator Barnier warned that British negotiators will not be able to insulate London from the impact of Brexit. Over 100 UK company heads have recently warned PM Johnson of the huge damage to the UK economy if Britain exits the EU without a trade agreement.

By contrast, Europe has falling COVID-19 cases and a huge spending PEPP programme of over €1 trillion alongside a proposed Recovery Fund to support the most struggling EU members like Italy. This should keep the EUR supported.

Therefore, expect EURGBP buyers on pullbacks medium term.

Swing trade outlook – We expect this trade to play out over the next 2 weeks. However, the trade will remain valid for as long as its underlying factors remain valid.

 

Trade Risks

If we see a swift rise in European COVID-19 cases that will also invalidate this outlook.

If we see the ‘frugal four’ (Austria, Denmark, Netherlands, and Sweden) reject the recovery fund this will drag the EUR down.

 

Entry/Exit Guide

Entry: 0.6561 buy on stop

Stop loss: 0.6551

Target: 0.6000

 


 

Learn more about HYCM

 

High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

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