Sunday, January 11, 2009

Forex - Monitoring eur/usd and gbp/usd correlation effect.

Usually the eur-usd and gbp-usd pair is positively correlated to one another, which means that if the eur-usd goes up gbp-usd also will go up and vice versa. However at this point of time the two pairs is not positively correlated due to changes in economic uncertainties that affect the global currencies. Therefore whenever eur-usd is going up GBP-USD is going down vice versa.

gbp candlestick charteur-usd candlestick chartThe effect of this actually you can see from the EUR-GBP which correlated directly to both of the pairs. So if you look at the eur/gbp it should shows very significant impact in its movement. As you can see that the EUR-GBP pair is moving downward this shows that the Euro is currently Weaker than pound sterling.

eur-gbp candlestick chart
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