TD Research still like EUR/GBP lower on the grounds that the prospects of selling EUR/GBP reflects a few short-term drivers.
"Despite the nearly 2% percent drop last week, we like following the momentum in the cross. For one, the cross is still trading rich to its key cyclical drivers. Our model shows the pair is 2.3 SD rich to our HFFV, which points to a move below 0.82," TD notes.
Moreover, TD notes that positioning data show the market is still long EUR/GBP, increasing the scope for pullback ahead of the French election and lowering the bar for a GBP rally.
EUR/GBP is trdaing circa 0.8539 as of writing.
Source: TD Securities ResearchOriginal Article
