Day 3: our EUR/GBP trade

EUR/GBP fell from a session high of 0.8453 to a low of 0.8423 yesterday and we wouldn’t suggest chasing this move lower.

Citigroup has suggested fair value on EUR/GBP is closer to 0.8550 and that sterling is pricing in a lot of good news; however we would stick by our call to potentially sell at 0.8480.

In European trade we saw ECB member Joerg Asmussen suggest it was ‘too early to start the exit’ in the eurozone, which caused EUR selling, while there were further concerns about Italian politics, although the Italian ten-year bond only gained one basis point.

In upcoming trade we get the latest read on UK jobs, with the jobless claimant count due and the market expects a drop here of 21,000 jobs. A weaker number than expected could push the pair higher, however the real kicker could come on Thursday when Mark Carney and a number of other BoE members are due to speak in London. Given the ten-year gilt is trading above 3%, they could use this forum to push back on rate hike expectations and thus sterling could fall, pushing the pair to our proposed limit.

Follow this market on our trading platform

Our Trader Radar watchlist is updated each week with the above market. To find the watchlist:

  1. Log in to the trading platform.
  2. In the Watchlist panel, select Trader Radar from the drop-down menu. If this panel is not visible, click the Watchlist button (at the top).
  3. Alternatively, select Trader Radar from the Watchlist section (near the bottom left hand corner) in the Finder panel.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.