GBP Trade Index 18-Year Chart

@Benny: Well that was just me more or less thinking aloud, so not really "answers" :)

Anyway, what you say is again interesting, and got me thinking. I suppose that synthetic trading range being nearly twice the actual trading range observed in that period is another way of saying that you tend not to get the two extremes for EUR/USD and cable happening at the same time.

(But I haven't thought about that very hard....maybe it's wrong).

Anyway, when I first started trading (a couple of years ago), there seemed to be long trends in EUR/GBP, usually in EUR's favour, and it was an easy trend-trade. Seems a bit trickier these days.



Don't know if this is any help:
http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/scalping_report/2010-01-11-1545-EUR_GBP_Consolidation_offers_Scalping_Opportunity.html

@Montmorency: "I suppose it's all a question of the relative speed of movement of EUR/USD versus cable, and of course in which direction"

"It is therefore fairly certain that it's EUR/USD and cable that are driving EUR/GBP and not the reverse"

above are the answers im looking for, so the cartel thingy is just a myth then :) how ever the multi year range for the eur/gbp is 4000 pips = 0.98 - 0.58

if i calculate the synthetic value from eur high and gbp low it gave the value of eur/gbp max at about 1.1851=1.60/1.35 and eur low vs gbp high 0.3886 = 0.82/2.11

multi year range for synthetic max at about 7965 pips = 1.1851 - 0.3886

i'll stay with eur/gbp trading i think :)

Hi everyone.. Can someone tell me what the forex spreads are like at CMC Markets, and whether you'd recommend them as a broker.

Thanks a lot

@Benny: I was thinking about this just now while out walking:

Let's say EUR/USD got down to 1.32 by mid March (as suggested in a recent AL Tweet), but that cable remained around, say 1.5900.

That would suggest a EUR/GBP value of around 0.8300, so around 400 pips down from where we are now.

However, for EUR/USD to fall that far, it would seem unlikely that cable wouldn't also fall.
Let's say cable fell to 1.5800 => EUR/GBP=0.8354
1.5700 => 0.8407
1.5600 => 0.8461
...
1.5200 => 0.8684
...
1.5000 => 0.8800

Well anyway, cable would obviously have to fall quite a way for the current value of EUR/GBP to be maintained in those circumstances.

I suppose it's all a question of the relative speed of movement of EUR/USD versus cable, and of course in which direction.

It is theoretically possible for there to be very Euro-negative news around which does not also directly impinge on the UK/Sterling, although I would have thought in practice, these things always have ripples outward.

If you believe in the concept of support and resistance (and I'm not really sure that I do, at least not very strongly), then you might postulate that say cable will find support at X, and resistance at Y; and that EUR/USD will find support at point A and will find resistance at point B; and you may even be right, at least for a while.

However, you will find it much harder to determine whether cable will reach point X before EUR/USD finds point A, etc. Therein would seem to lie the difficulty.

There is also then the question of relative number of trades in EUR/USD, cable, and EUR/GBP.
I can't find the statistics quickly, but it's pretty certain that both EUR/USD and cable are each individually more dominant than EUR/GPB. It is therefore fairly certain that it's EUR/USD and cable that are driving EUR/GBP and not the reverse. For this reason, I find it rather unlikely that any organisation (be they a "cartel" or otherwise) could use EURGBP to manipulate EUR/USD and/or cable.

@Mont: if euro and gbp/usd both go down, then eur/gbp only goes down if euro declines at a faster rate than gbp/usd.

eur/gbp IS the short-term tool utilized by the Goldman-backed Cartel to feed their mouths.