Currency Analyst since 2010

Citi: sell EUR/GBP

Analysts at Citi recommend traders to stay away from EUR/USD as it provides conflicting signals: on the one hand, equities and peripheral debt suggest a much higher EUR/USD, but on the other hand 5-year rate spreads (Germany/USA) suggest much lower EUR/USD.

According to Citi, it’s better to sell EUR/GBP on the rallies (these rallies may be about 200-250 pips). Although there are too many people doing this trade right now, the specialists remind that the same was with AUD/NZD – still this pair was falling due to the hawkishness of the Reserve Bank of New Zealand. Citi thinks that EUR/GBP is guaranteed to decline in a sustainable trend as the Bank of England is hawkish. The bank says to take profit when the Bank of England hikes its benchmark rate.

Chart. Weekly EUR/GBP

Chart. Weekly EUR/GBP

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