Shorting Opportunity for EUR/GBP
09/03/2008 12:00 am EST
It is the last week of summer and the market seems to be on vacation in many ways. However, there were some interesting developments today that may lead to an opportunity in a cross. The EUR/USD jumped up a little today on some well placed verbal intervention from Axel Weber. He seems to want the market to believe that a rate cut from the ECB is unlikely. Traders responded by driving the EUR up in value against even the USD.
One place that this revaluation was particularly dramatic was against the terminal GBP in the EUR/GBP cross. However, a closer look reveals a tight channel and an intact resistance level. This may be a nice short term trade to the downside of this channel 170 pips away. Keep in mind that the EUR/GBP has a pip value almost twice the size of other USD quoted pairs so adjust your risk control accordingly..