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Chart of the Day: EUR/GBP
Thursday, 09 October 2008 05:51:48 GMT  |  Thomas Long, Power Course Instructor
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A look at the daily chart of the EUR/GBP shows a range today of over 200 pips. It has been years since this pair has had this kind of a move in one day.

eurgbp

It is showing EUR strength with GBP weakness since the pair rallied. This kind of a move is big enough to take notice and my interpretation is that there is a big shift in sentiment on these two currencies. While they had been in somewhat of a range since April, this week we saw a quick move down through the lows and then this big rally. This is a clue for traders to use the weakness of the GBP and the relative strength of the EUR to their advantage. Instead of selling the EUR/USD, one could sell the GBP/USD on the assumption that the GBP weakness will continue and could result in a better trade. These dynamics change frequently, but the relative strength of one currency with another is an edge that FX traders want to use every time they look for a trading opportunity.

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