Using EUR/GBP to Time Entries on GBP/JPY and EUR/JPY
Hello traders, Today, we’ll see how you can use another forex pair — EUR/GBP — to help you time your entries on both GBP/JPY and EUR/JPY. If you trade the forex market, you already know that some pairs have positive or negative correlations. Some move together, while others move in opposite directions. GBP/JPY and EUR/JPY are highly correlated. Most of the time, they move in the same direction and show similar structures. Why? 1. The pound and the euro are both European currencies. 2. They are influenced by similar macroeconomic drivers. 3. They are both trading against the Japanese yen. 4. The yen reacts strongly to global risk sentiment (Risk-On / Risk-Off). So when global sentiment shifts, both pairs often move together. But here’s where it gets interesting. The Key Insight: EUR/GBP Shows Relative Strength EUR/GBP tells you which European currency is stronger right now. - If EUR/GBP is bullish → the euro is stronger than the pound. - If EUR/GBP is bearish → the pound is...