Exclusive: Quantitative analyzer Goes bearish EUR/GBP
Quant Signal: Short EUR/GBP.
Models show a confluence of negative signals for EUR crosses. Once again, there are eight downtrends for EUR in G10 and no clear uptrends. Our preferred expression is to short EUR/GBP where the trend is just about to break lower.
In our view, the options market may be re-pricing the balance of risks with EUR/GBP overbought on Brexit fears vs.growing political risks on the continent. The EUR/GBP MAA has recently started descending, while the bearish Up-Down vol indicator shows greater downside volatility.
Lastly, the Residual Skew is now tilting for EUR/GBP puts.