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Why the Pound Could Take a Hit

St George's Flag & Houses of Parliament
Peter Adams | Photodisc | Getty Images
St George's Flag & Houses of Parliament

Europe is on everyone's minds, but this strategist is more interested in a trans-Atlantic trade.

Sure, it's fun watching the euro twist and turn.

But Camilla Sutton, chief currency strategist at Scotia Capital, thinks there is money to be made on a trade outside the euro zone.

"Selling sterling against Canada makes for a really reasonable trade" in the near term, Sutton told CNBC's Scott Wapner.

On a technical basis, the pound "is a long way from oversold," she says, and the moving averages all suggest it could weaken from current levels.

Sutton also thinks the Bank of England may increase asset purchases in the wake of the latest CPI report.

And in Canada, "the fundamentals are pretty good, particularly on a relative basis."

Sutton recommends entering the trade at 1.56 with a target of 1.54 and a stop at 1.5720.

You can watch the discussion on this video.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Terms Dictionary. Top currency strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about - email us at moneyinmotion@cnbc.com.

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