EUR/GBP: Risks skewed to the upside – Danske Bank

Analysts at Danske Bank notes that in the majors, GBP saw renewed support yesterday following the higher-than-expected CPI print and they still see risks skewed to the upside for EUR/GBP in the near term targeting 0.88 in 1M.

Key Quotes

“However, investors are still very short GBP according to IMM Positioning Update, 20 March, and as the Brexit risk premium priced on GBP seems to have increased in recent weeks, we see little potential for a break above 0.90. Tactically, we still like to buy EUR/GBP on dips, and think the move lower today is a good opportunity to go long for new test of the March high at 0.87875.”