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Chart of the day: Trade idea – short EURGBP

We suggested long positions in GBPCAD at 1.7240 on (23 January) on Telegram (sign up here), with a target of 1.7500.

EURGBP daily chart

With spot trading just shy of the 1.7500 target and with Russia and OPEC likely to offer support to the crude market, we look to take profits and roll GBP long exposures into short EURGBP positions at 0.8424.

With Boris Johnson due to speak tonight, and the risks favouring further GBP strength, selling EURGBP makes sense even if GBP positioning is modestly stretched. Tactically, it is prudent to initiate with a small position size, with stops at 0.8480, and subsequently looking to add further short positions on a close through the double bottom of 0.8378.

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