I had a nice lucky trade to start this week, selling EUR/USD above 1.2650 and I bought back almost 3/4 of this position below 1.2490. I’ve still got a small short position but I’ve now turned this into a EUR/GBP trade, by buying cable here at 1.5550. As you well know, I’m usually bullish cable in the mid 1.50’s as I think these levels are simply too low and in the present climate, I do prefer the short EUR trade.
I’m not alone in my thinking, as according to prime broker reports the remaining big hedge fund EUR shorts are in EUR/GBP, and there is of course the risk that these shorts get squeezed tonight or on Monday. Nevertheless, it’s a calculated risk and as it’s a small position only, I do not need to worry too much about it.
