Buy the dips in EUR/GBP – Danske Bank

Aila Mihr, Analyst at Danske Bank, has recommended buying the European cross on occasional dips.

Key Quotes

“In the majors, GBP saw renewed support yesterday following the higher-than-expected CPI print. We still see risks skewed to the upside for EUR/GBP in the near term targeting 0.88 in 1M”.

“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”.