The rally in the FTSE 100 and EURGBP goes from strength to strength. While I have been predicting further upside in both, the sheer power in Friday’s move took me be surprise, especially in the case of the single currency. With benign monetary conditions, positive seasonality, and improving economic fundamentals, it would likely take a nasty macro shock to cause all this to come off the rails. A couple of years ago, the Japanese earthquake and Arab Spring caused a Q1 wobble. The most likely candidate today would surely be the ongoing fiscal uncertainties in the US.
For today, I would be looking for long positions in FTSE, DAX and EURGBP, and seeking shorts in GBPUSD.
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