ANALYST PICKS

The vaccine trade is booming


EUR / GBP Price analysis and news

  • TRADE IN VACCINES TOTALLY FOR GBP BULLS
  • EUR/ GBP DISTRIBUTION IN A NEW RANGE

THE VACCINE TRADE IN TOTALLY FOR BULLS GBP

The British Pound has gotten better and better in recent sessions with the booming vaccine trade, in which the EUR / GBP is now trading at its lowest level since May 2020. The UK government has had some success rare with its vaccine rollout program, whereby 4.6 million people received their first dose of the COVID vaccine yesterday. As can be seen in the graph below, the number of doses administered per 100 people is significantly higher in the UK at 7.47 compared to the rest of the G10 countries, especially compared to the EU which follows at 1.45.

THE UNITED KINGDOM WINNING THE VACCINE RACE

Bearish EUR / GBP: vaccine trade is booming

Source: Our global data



of customers are net long.



of customers are net short.

Switch

Long

Shorts

OI

Daily 1% 12% 6%
Weekly -9% 52% ten%

EUR / GBP ENTERING A NEW RANGE

That said, with the UK leading the vaccine race, the outlook looks rather optimistic for the UK economy to rebound. In turn, comparing with the less successful rollout program for the EU, which had to cut shipments of Pfizer’s COVID vaccines, the EUR / GBP seeks to further expand the losses. As I noted in our GBP guidance for Q1 2021, a break below support at 0.8860 could see cross trade in a new range of 0.8600 to 0.8800. Keep in mind that with a huge cloud of uncertainty over the now eliminated Brexit, the GBP has become even more attractive against the EUR, which had long been a guide for Brexit sentiment.

GBP Forecast

GBP Forecast

Recommended also by Justin McQueen

Download our new forecast for the first quarter of 2021 in GBP

THE SETUP

With a clear break below key support at 0.8860, the next level of interest is around 0.8750, coinciding with the rate of 61.8%, below that level and downside risks could extend towards 0.8700, while rebounds at 0.8860 and 0.8900 are likely to be washed out. Elsewhere, for those who prefer their techniques, a 50 / 200DMA death cross suggests that the risks are on the downside for EUR / GBP.

EUR / GBP bearish: vaccine trade is booming

Source: Refinitiv

DailyFX Education: A trading journal is an important tool for a trader at all levels. This will help you identify your trading style, assess your thought process, and review your past behaviors.To learn more about a trade newspaper, check out the link below.

Trading Journal: what is it and how to create one



Tags

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close