After reaching a multi-month high of €1.29 in July, the sterling/euro exchange rate dropped 5.5¢ in two months, says Ragu Dharmaratnam of Baselica.
But despite the pound's retreat, its one-year uptrend (pink line) is still intact. It also enjoys robust underpinnings from previous horizontal support (blue) and the black 200-day moving average at €1.22. Buy pounds and sell euros, targeting €1.29. By contrast, a drop through €1.22 would be a good moment to short sterling.
