Euro Cross Pick 03.22.2011
The short NZD/USD recommendation from the previous day never panned out as the pair closed above the 10-Day SMA (0.7334) at 0.7353, but there appears to be an opportunity to sell the EUR/GBP as it continues to come off of the yearly high (0.8760). I’ve been waiting for the euro-pound to come back below 0.8650 (former resistance) to play the near-term correction in the pair, and the reversal in the exchange rate should gather pace over the coming days as the relative strength index carves out a top ahead of 70. Although we have a lot of event risk scheduled for Wednesday, I feel confident in testing the waters and will sell the pair at market if we get a close below 0.8650. If things go according to plan, I will look for a test of the 100-Day SMA at 0.8508, with a stop at 0.8728, the overnight high.
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