January is over and no doubt so are the good intentions and gym visits. Take solace in the fact if you have had a ‘dry’ January you can now drink some alcohol. New month and same old Dollar. It continues to strengthen against the EUR and has had another move against Sterling. I know I sound like a broken record on the US Dollar although I can’t emphasise enough that if you purchase USD and have a GBP/USD exposure you need to have some protection in place.
I don’t see much upside on Cable (GBP/USD) this year and I do feel we’ll be trading in the 1.47s shortly. Please send me an email and we can discuss implementing a strategy for you to provide you protection from downside risk whilst allowing room to manoeuvre should we see a spike on GBP/USD. If you are a seller of USD then I would suggest placing market orders at staggered levels to take advantage of intraday moves and the general bearish trend on GBP/USD.
GBP/EUR had a prolonged move to the upside throughout January. With the major market events of the ECB meeting/QE and Greek elections now past I see GBP/EUR settling into range bound trading. If anything, I see a slight pullback in February although it won’t be a major move. With GBP/EUR at these levels it may be wise to lock in some of your requirement.
Will it go higher? Yes, I think it will gradually this year (although as I’ve said I think we’ll end up trading around 1.32 at the end of the year) and 1.35 is the next major resistance level to break. I think it is a push to expect 1.35 to happen this month though. If someone had offered you a level of 1.30 or above 3 months ago I think it is fair to say you would have locked in a fair amount of your exposure at that level. Human nature as it is, we all want more. If you think GBP/EUR will push higher please consider placing market orders. You can leave them in the market and if and when we reach your desired level your currency will be purchased for you. One less thing to worry about.
I’ve detailed some levels below I think you should consider when placing market orders. Please contact me to discuss the reasons for the suggested levels -
· GBP/EUR buying (1.33/1.3350)
· GBP/EUR selling (1.3250/1.32)
· GBP/USD buying (1.52/1.5250)
· GBP/USD selling (1.50/1.4950)
As always, if you have any questions please let me know.
Have a great week.
Written by Liam Alexander