Dear Mike, Rhody has it right: there is a lot of balance between the two currencies, at present, but they are in very different places
for 2015…
It also depends on how you look at this: short-term, medium-term, long-term…
How are you wanting (and why are you wanting) to trade this pair? Are trying to side-step EUR/USD and find a less crowded,
exposed pair?
The correlation between EUR/GBP and EUR/USD is often swapped with correlation with GBP/USD, so it often means uncertainty
as to which pair will pull this cross the most… Like other crosses, you are pulled here between two Majors, and it is hard to
know where direction will come from: EUR/USD is only rising because of US Dollar (composite index) weakness, rather than
Euro strength; GBP/USD was rising due to the post-election relief, but the quarterly inflation report only days later flattened
any gains… The Pound’s strength was zeroed in 2014-2015 when it became clear that interest hikes would be well beyond
what the market had front-run; the USD is going through this phased a little bit later on, but is experiencing a similar
disappointment - a realisation that the forecast (June 2015) rate hike from the Fed may actually not happen until, possibly,
So, how does this leave EUR/GBP traders?
I have written extensively about this pair:
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video from 1.5 years ago: Forex: EUR\/GBP long-term technical strategy. ;
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article: EUR/GBP Cycle Window shows upward mobility | Forex Crunch
Unfortunately, my cycle analysis showing a 0.77(50) bottom - and subsequent reversal - was not vindicated! I was wrong,
hands up…
Happy reading!