The break below .8400 in EUR/GBP was a signicant event but once again the FX market shows how dangerous it can be with a sharp reversal from the .8280 lows seen in early Europe. Selling rallies still remains the obvious strategy in the cross and with EUR/USD seemingly caught in a 1.21/1.25 Panda bear hug, I’m looking to buy cable when the cross seems to be topping out close to .84 and when the EUR/USD is on the 1.21 handle. Not sure if this will happen but I’ll wait for dips. I think it’s possible that EUR/GBP could fall to .80 once the next bear leg begins and if it does, and EUR/USD goes back to 1.2450, that would see cable at 1.55.
(add) A clear break below 1.4350 would nullify my buy-dip strategy.
