Trade of the week: short EUR/GBP
We will go short EUR/GBP as the downtrend reasserts itself. Our stop loss is £0.8477, with a downside target of £0.8205.
(Video Transcript)
Previous trading outcomes
Chris Beauchamp: Good morning, everybody, and welcome to "Trade of the week" for the week beginning Monday, 24th March. The last week of March, and indeed the end of quarter one (Q1). Now, let's look back, and I'm going to enjoy this one this week. Let's look back at last week's trade, which was long the S&P 500 with our stop at 5,500. Now, the regular viewers will know that this was Axel’s "Trade of the week" from the week before and was stopped out within hours of going live.
That happens in times of market volatility. This one, however, and you have to let me have this win, has done quite nicely it has to be said. We are now up 5,722, about 100 points higher than where it was when we were talking about buying it. It has been a choppy week, and you might argue that there might be a further leg lower, but we've had a strong start to this week.
The price has gapped up overnight. We are 100 points off the lows of last week and for the time being, we're going to stick with this one. It might turn to nothing if we get some more volatility but for the moment risk appetite is up across the board and the index is doing very well. So that's last week's trade from the 17th, St Patrick's Day, really working out nicely.
We're going to stick with the long S&P 500 trade on that one.
This week's trading opportunity
Let's go to this one for the week Monday 24th March. We're going to go short EUR/GBP. This one, as you can see, has been on a steady, steady downtrend for quite a while, it has to be said, all the way back into the beginning of 2024, selling the rallies has generally been the way to go in EUR/GBP, and it looks like this is going to continue.
So, we've had another lower high here from mid-March at about £0.8450, and we've now dropped back pushing back below this 200-day moving average. You could see a resumption of this move back down perhaps as far as these lows. So our trade for the week of 24th March, short EUR/GBP. Our stop, we're going to put it, give it some room here because it's quite a choppy one.
£0.8477 above these highs from the 20th January, above that previous lower high. That's our stop there. And then following our 2-to-1 risk-to-reward rule, we're putting our stop down here at about £0.8250, I think, we're going for on that stop, £0.8250.
So, that is the "Trade of the week" for the week beginning Monday 24th March, short EUR/GBP, with our stop at £0.8477.
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