Euro Cross Pick 02.22.2011
The EUR/GBP extended the advance from the end of the previous week, with the exchange rate climbing to a high of 0.8470 on Tuesday, but the rally could be short-lived as the Bank of England is widely expected to maintain a hawkish tone in its policy meeting minutes due out tomorrow at 9:30 GMT. As the euro-pound struggles to get back above the 50-Day SMA at 0.8475, the exchange rate may consolidate throughout the North American trade, and I may test the waters and short the pair if we see it close below the moving average. In turn, I will look to sell the EUR/GBP at market and will leave an open target for now as I expect the exchange rate to fall back below 0.8400, with a tight stop at 0.8480, the 20-Day SMA.
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