EUR/GBP: Long position at 0.8785 – TDS

FX markets may return their focus to Europe this week. Analysts at TD Securities think the recent pullback in EUR/GBP looks ripe for a reversal higher as a result. 

Key quotes

“On Tuesday, finance ministers from across the euro area will meet to discuss a package to help countries hit particularly hard by the crisis. This package now looks very likely to get approval.”

“With the Prime Minister now in the hospital, the market may be starting to sense a leadership vacuum is brewing on Downing Street. This could take sterling with it.”

“The end-June Brexit extension deadline continues to inch closer, providing an unnecessary and unwelcome distraction at a time of national emergency.”

“We have entered a long EUR/GBP position at 0.8785. Against a stop at 0.8605, we think 0.8740 should provide a primary backstop for a potential move higher this week.”