The euro seems to be making a move towards the 1.400 number, and we may see this taken out early during the week. It is likely that there will be correlation with the GBP, which in turn may give good days for stocks. We have been referring to this EUR/GBP chart for some time now and hopefully we will take some more pips from it. Previously, we have been looking to sell from the ellipses. We are now falling and approaching the 50% retrace line. As I am one of the few who believes that we should be bullish in the short term about the euro, I plan to take advantage of this by buying the euro against Sterling rather than the dollar. With this type of trade there is always the chance that if my analysis is wrong and both GBP and EUR start to fall then the EUR can always out perform the GBP giving us a profitable trade. I will be looking for longs from the .8665 area.
Tags: EURGBP, Technical Analysis
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