Sell EUR / Buy USD and Sell AUD/ Buy GBP

Recently, the US Dollar was registering oversold readings.

Inversely, the Euro and British Pound were overbought.

Pundits are citing improving prospects for the EUR and GBP, while the strength in these currencies is ONLY due to the weaker USD.

Specifically, the EUR has “no business” trading at around the 1.18 mark (against the USD) respectively.

In actual fact, neither currency is exhibiting “strength”.

The chart below shows they EUR/GBP cross has been trading sideways for months.

If you have EUR, it’s prudent to Sell some of your “temporarily” strong currency and Buy some USD.

My best FX trade however is, sell AUD / buy GBP at 0.5485.

Target is 0.5090

 

This are general thoughts, see my disclaimer

August 27, 2020

by Rob Zdravevski

rob@karriasset.com.au

 

sideways EUR:GBP

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