Barclays Capital with their trade of the week in latest client note courtesy of efxnews.com
The trade is macro-technical driven.
On the macro front, Barclays rationale is as follows:
"We expect GBP to appreciate next week as at least one member of the NPC votes against holding rates unchanged, whereas our expectations for a steeper BoE inflation profile and expectations for higher wages will likely imply an early but gradual tightening cycle, which we continue to expect in Q1 2016," Barclays projects.
On the technical front, Barclays rationble is as follows:
"Technically, we are overall bearish for EURGBP and would prefer to use upticks as an opportunity to sell at better levels. Resistance in the 0.7225 area is expected to generate selling interest for a move lower toward initial targets near the 0.6930 range lows. A break below 0.6930 would encourage our bearish view and signal further weakness toward our greater targets in the 0.6770 area," Barclays adds.
What do you think of the recco ? The pair does seem offered still but I'm not sure it goes down as far as Barclays see it.
