Sell EUR/GBP above 0.8950 – Danske Bank

Sell EUR/GBP above 0.8950 – Danske Bank

Senior Analyst at Danske Bank Jens Sorensen recommended selling the European cross on upticks to the  mid-0.8900s.

Key Quotes

“GBP weakened versus the rest of the G10 space yesterday, driven mainly by GBP/USD selling (USD buying) amid US-Chinese trade war concerns”.

“Appetite for GBP exposure may also have been impacted by comments from UK Trade Minister Liam Fox on Friday that a no-deal Brexit is the most likely outcome now. However, we would not put too much emphasis on these comments”.

“Instead, we think that the clearance of the two key support levels in cable at 1.2973 and 1.2950 may have accelerated GBP selling yesterday. We look for EUR/GBP to remain rangebound (0.875-0.895) near term with Brexit uncertainty expected to remain a key source of volatility. From a risk/reward perspective, we would consider selling EUR/GBP if the cross breaks above 0.8950.”.