EUR/GBP exchange rate

I've been trying to understand the EUR/GBP exchange rate and its fluctuations lately. One thing that's been boggling my mind is the key differences between the Eurozone and the UK economies that play a role in shaping the EUR/GBP exchange rate. Can someone shed some light on this?

 

If I can advice you something the one and only advice will be: resign from the fundamental analize and start using technical analyse tools

 

First off ignore anyone who says ignore fundamentals.

Second when it comes to FX (currencies) it is all about interest rates and the differentials between countries. So as to EURGBP that would be mainly 10 year German Bund and 10 year UK Gilt.

Here is daily EURGBP:-


and daily Bund/Gilt spread ratio chart:-

 

If you are going to day trade, best to focus on the major pairs in USD.

 

Must bestow a lot of confidence to take trading advice from some anonymous gurus, especially those who until yesterday claimed technical analysis to be the only valid approache to trading and speak today of fundamental analysis. Such an entertaining circus.

 

It doesn't change much.

 

Determining the "best" method of analysis for forex trading, whether technical or fundamental, is subjective and depends on various factors. Traders need to consider their time frame and the availability of information to determine the most suitable approach.

 

Yup. And umm use the right scaling on their charts too.

 

Eur/Gbp is too hectic from a technical analysis standpoint. Managed to get some substantial profits at one point, but since then I’m struggling with it.
Didn't try fundamental analysis properly though. Perhaps it will work better.

 

EUR and GBP are highly correlated currencies, and the pair therefore has a very low historical volatility score. This is the least volatile GBP pair - GBP/JPY being the highest (it's the most volatile of all the major pairs) and even GBP/USD is higher.

Low volatility suggests lack of follow-through on TA signals, transient and inconsistent trends, longer holding times for the same % profit.

If you can't get hold of historical volatility or you want something more responsive and relevant, take the ATR of this pair and convert it to a pecentage of price - do likewise with the ATR of GBP/USD - EUR/GBP will almost always be lower.