Didn’t we said the same thing last month too ?! Well, Yes we did and still we maintain the same buy side bias as we did even during previous month ! Argument is still pretty much intact about BOE and ECB divergence. If USD remains little lenient and merciful to Euro then pound weakness will take care of itself. Because extreme USD strength usually hurts Euro the most. So that’s the factor of concern if things start changing.
After a shocker NFP, Euro’s resilience is admirable. Besides it looks like AUD and NZD are helping in creating weak USD sentiment, otherwise EUR/USD was almost on the verge of breakdown. For EUR/GBP to soar, even if Euro doesn’t strengthen much but mange to remain steady then the pressure on GBP is sufficient to push the pair higher. We managed to get entries between 0.8200 and 0.84000 but were less confident since pair went sideways and GBP was showing the sign of life. A retouch of 0.8600 has helped to clear the air a little bit. If 0.8600 gives up then next destination will be a quick trip to 0.8800, where we would like to take another round of partial profit.
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