Rember Grexit. At that time Euro came under severe selling pressure because people were worried that Greece exit from the EU could result in other departures. That is now all forgotten.
Surprisingly, BREXIT so far resulted only in week GBP, because the markets have been focusing on what will happen to Britain after its departure from the EU. The markets devote little attention to what will happen to the EU. The is wrong. If Grexit resulted in worries about the EU future, Brexit would likely result in significant larger panic. When this happens, the markets will sell EUR.
So if you believe, that Britain is on the way out, then you should get ready to sell EURUSD.
Confused…. What will Sell EUR buy USD be a good trade? USD has been increasing last few months anyways…And secondly, why not playing GBP, why play EUR???
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At the moment, everybody talks what will happen to the UK after Brexit. GBP is down to all-time lows, as the market is very concerned about hard Brexit scenario. The hard Brexit is priced in. If the hard Brexit does not materialize, as I believe will be the case, the GBP should re-rate. Of course, there is a GBP downside risk, but given the GBP fall to all time lows, I believe that the upside potential has a higher magnitude than the downside risk.
At this moment no one is seriously questioning the future of the EU and EUR. It is not on the agenda right now. When Greece was under threat of a departure from the EU, people did question future of the EU and EUR. When the negotiations with the UK commence, then this issue will become alive again. In Grexit case, EUR went down. In Brexit case, the worry may be bigger and therefore the pressure on EUR may by stronger.
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