How to Short the Euro Against the Pound Successfully

TL;DR

To short the euro against the British pound, target a price of 87.50 with a stop-loss set at 90.22, based on technical analysis like the ascending triangle and three driver pattern. The trade is influenced by the stability in the UK and ongoing Brexit negotiations, suggesting a bearish outlook for the euro.

Transcript

Welcome to trade ideas. I'm Jake Merle sitting down with Joe Perry of Forex analytics Joe great to have you back on the show Thanks. I was great to be here Jay So you were last here about a month ago going along the Euro against the dollar it looked like it was breaking out around 113 or so, but then it quickly reversed and you got stopped out with... Read More

Key Insights

• 🏤 Perry's previous long trade on the euro against the dollar did not work out, but he is now confident in his short trade on the euro against the British Pound.
• 🏤 Technical indicators such as the ascending triangle and the three driver pattern support Perry's bearish thesis on the euro.
• 👶 Stability in the UK, ongoing Brexit negotiations, and the search for a new Prime Minister are factors influencing Perry's trade.
• 🧡 The target price of 87.50 represents a 50% retracement of the range the euro has been trading in.
• 🛀 A bearish bat pattern and an Elliott Wave reversal pattern also suggest a potential move lower in the euro.
• 👀 Data releases and the upcoming Fed meeting could impact Perry's trade, as he is closely watching for any changes in market conditions.

Questions & Answers

Q: Why is Joe Perry looking to short the euro against the British Pound?

Perry believes that the euro is weak overall and sees stability in the UK, making it an opportune time to go short on the euro.

Q: What technical indicators is Perry using to support his trade?

Perry is looking at the ascending triangle pattern and the three driver pattern, both of which suggest that the price will roll over and move lower.

Q: What are the key levels to watch for in this trade?

Perry will enter the market around 89.7b and set a stop-loss at 90.22. If the trade breaks through, he will look to get short again around 91. The target on the downside is 87.50.

Q: What is the biggest risk to Perry's trade?

The biggest risk is if the ECB becomes less dovish or if the data in the next month shows better than expected results, which could push the euro higher.

Summary & Key Takeaways

• Joe Perry previously had a long trade on the euro against the dollar, but it quickly reversed and he got stopped out.

• He is now looking to go short on the euro against the British Pound due to weakness in the euro and stability in the UK.

• Perry analyzes technical indicators such as the ascending triangle and the three driver pattern to support his trade.