EUR/GBP is the forex ticker that tells traders how many British Pounds are needed to buy a Euro. It is one of the most traded currency pairs worldwide because it marries two significant European economies: the European Union (EU) and the United Kingdom (UK). Today’s price action has sterling down against almost every currency worldwide indicative of not just a strong dollar (cable) but rather global concern around the status of the UK economy. The British pound atypically slumped over 4.8% during Asian trade this morning, traditionally a period of low trade volume and minimal price volatility. While the low trade volume (lower liquidity) may have had a hand in the significant price move, the fundamental catalyst stems from the UK’s new Chancellor Kwasi announced additional tax cuts – the highest in 50 years. Based on the current monetary policy stance of the Bank of England (BoE), the central bank intends to raise interest rates to combat inflation. Once fiscal support ends, an approach that may help consumers short-term (energy price caps) will likely cause inflation pressures to balloon in the medium/long term. Supplementing the problem is a weakening local currency leaving inflation susceptible to the upside. Money market pricing shows a sharp increase in interest rate increments from roughly 57bps last week for the November meeting to 75bps today. Trade Position. I trade in EUR/GBP today. The EUR/GBP market trend is looking downward. It sells my trade at 0.8941 with a lot size of 0.90. Now my transaction is running in profit of 13.10. I hope I will get a good profit from this trade.
Trade Close. Now I stop my EUR/GBP trade at 0.8921 and have a profit of 20.18 dollars from this trade. The EUR/GBP price is moving the market trend downward.
Take Profit = 20.18