Danske Research adopts a bearish GBP bias and prefers to express that via an options structure.
"Near-term, we expect a repricing of the Brexit risk premium ahead of the 1 July deadline to send EUR/GBP higher again. We believe this will mirror similar events in late 2018 and summer 2019," Danske notes.
"We like to express our tactical bearish GBP view via options, which we believe allows for attractive risk-reward. Specifically, we recommend entering a 2M EUR/GBP 1x2 ATMS call spread with strikes of 0.8910 and 0.9070, respectively," Danske adds.