Trade of the Week: long EUR/GBP

(Video summary)

Natural gas

Welcome to IG's trade of the week. Last week, we talked about how to make money by shorting natural gas. Guess what? That trade is still going strong! The natural gas market keeps getting weaker, which means our strategy is working out pretty well. We have a bearish outlook for the short-term, meaning we expect prices to continue going down.

Long EUR/GBP

Now, let's dive into this week's video and learn something new. We're going to talk about an interesting trade idea: going long on euro/sterling. Don't worry if you're not familiar with these terms, we'll break it down for you.

Euro/sterling is a fancy way of saying the exchange rate between the euro and the British pound. And going long simply means we believe the euro is going to strengthen against the pound.

Why do we think so? Well, EUR/GBP has been recovering nicely in the past week. It keeps reaching higher highs and higher lows, which is a good sign that an uptrend is happening. The price has also moved above the 200-hour moving average, which is like a trend indicator, and it looks like it's going to keep going up.

To be safe, we need to be prepared for some potential volatility. There are some important meetings coming up that could shake the market a bit. That's why we suggest setting the stop at 86.80. This means if the trade goes against us and the price falls below that point, we'll automatically exit the trade to limit our losses.

But let's focus on the positives! Our initial target, the level we hope euro/sterling will reach, is 88.40. The last time it was at that level was back in May. So if everything goes according to plan, we could make some nice profits.

So, to sum it up, this week's video is all about going long on euro/sterling. We're aiming for a target of 88.40 and our stop is set at 86.80.