Using EUR/GBP to Time Entries on GBP/JPY and EUR/JPY

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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 stronger than the euro.

This gives you a relative strength advantage. 


Practical scenario 

Let’s say: You are a trader who only trades GBP/JPY. You check EUR/JPY and GBP/JPY. You have a bullish bias on both. Now you look at EUR/GBP.


Case 1: EUR/GBP is bullish 

This means the euro is currently stronger than the pound.

What does that imply?

- EUR/JPY is likely to push first.

- GBP/JPY may lag slightly.

- If EUR/JPY breaks structure aggressively while GBP/JPY hesitates, it confirms euro dominance.


In this case, chasing GBP/JPY immediately might not be optimal. You may wait for:

- GBP strength to return, or

- pullback entry on GBP/JPY once euro-led risk sentiment spreads.

- Or if you have an entry, you know you’ll have to be more patient. 


Case 2: EUR/GBP is bearish

Now the pound is stronger than the euro. This is important. If both EUR/JPY and GBP/JPY are bullish, but EUR/GBP is bearish:

- GBP/JPY is likely to be the leader.

- It may break structure first.

- It may move more impulsively.

This gives you confidence that GBP/JPY is the stronger expression of the move. Instead of hesitating, you now have cross-pair confirmation.


Why This Matters

This matters because most retail traders look at one chart in isolation. They don’t analyze: Relative strength, Flow rotation, Currency dominance & Cross-market confirmation. It will help you to create a bias, avoid technical and psychological mistakes. 

Here’s an example if we look at GJ, EJ & EG from the same time period. EURGBP was making higher prices and what happened? EURJPY broke out violently from the higher time frame range while GJ was still in it hesitating. But eventually GJ caught up. Timing is important!


EURGBP: https://www.tradingview.com/x/TJvFAJSa/



EURJPY: https://www.tradingview.com/x/6ViqzeSr/



GBPJPY: https://www.tradingview.com/x/voXSgxYU/



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