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Euro Cross Pick 02.02.2011

Euro Cross Pick 02.02.2011

2011-02-02 14:52:00
David Song, Currency Strategist
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Following up with the EUR/GBP short trade from earlier this week, I added to my position and sold the pair again at 0.8557, just slight above my initial entry at 0.8545. My positions are certainly in-the-money as we see the British Pound outperform against its major counterparts, but the euro-pound is likely to face increased volatility going into Thursday as the EU Summit kicks off, while the European Central Bank is scheduled to announce its interest rate decision at 12:45 GMT. As the EUR/GBP now appears to be trading within a downward trending channel, I will continue to look for a test of the 200-Day SMA at 0.8456, but may look to tighten my stop to 0.8545 later tonight as we expect the ECB to adopt a hawkish outlook for future policy.

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