3 new FX trade ideas and update on EUR/GBP

Find out what new ideas Chris has in the forex space, as well whether his previous trade idea is going according to plan.

GBP
Source: Bloomberg

GBP/USD

Good selling has come into the pair after rallying above Friday’s high. At the time of writing, cable looks destined to close below Friday’s low, therefore printing a bearish outside day reversal. The various oscillators are not suggesting a major correction in the pair is coming anytime soon, but the reversal after a strong move from $1.4951 could be the start of something more negative.

AUD/NZD

Overnight we saw a new all-time low of NZ$1.0332, but the pair has since recovered somewhat and traders are keen to see if the pair can close (09:00 AEDT is the New York close) below the prior low of NZ$1.0355. If this materialises, then the natural target would be parity. However, the daily candle is shaping up to be quite positive. Still, there is no denying the technical picture on the daily chart is looking quite bearish.

EUR/GBP

I suggested short EUR/GBP positions on 10 February at £0.7480 but the pair failed to achieve that level, hitting a high of £0.7455. The trend is weak and continues to print lower highs, which can be best seen on the hourly chart. The close below the 25 January low of £0.7405 seems important and short positions are widely preferred. EUR/GBP is a good way of hedging concerns around Greece as fixed-income traders will be rolling European fixed income exposure into UK gilts (bonds), which in turn will create upside potential in the pound.

USD/CNH

Strong bids have been seen around CNH6.24 and the pair has seen a strong move higher. A break of the February high of CNH6.2897 could be on the cards. This would be very interesting as it implies speculators have a strong conviction that the People’s Bank of China are likely to weaken the CNY after the New Year holiday. For those who like trends, this pair is one for the radar.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.