April 16, 2009
The EUR/GBP Pair - An Easy Pair To Trade?
The EUR/GBP pair is often overlooked by many forex traders because it isn't the most volatile of currency pairs. Indeed it has one of the smallest daily ranges out of all the major currency pairs - usually around 80-100 points.
However I think if you are new to forex trading and want to experiment with an intraday system, then the EUR/GBP is an excellent pair to trade. The reason why is because of the very fact that it moves so slowly. You can take your time entering and exiting your positions, even if you trade the shorter time frames such as the 5 minute charts, for instance.
Another reason why it's a good pair to trade is because it conforms extremely well to technical analysis. You only have to plot the RSI (14) on the 5 minute chart, along with Murrey Math lines, to see how well it bounces off of the overbought and oversold levels, so it's ideal for scalping say 10-15 points, particularly in the evening/overnight session when the pair is largely range-bound.
Finally, the EUR/GBP generally has very tight spreads, so overall if you are just starting out and wish to trade a relatively slow-moving, but predictable currency pair, then the EUR/GBP is an ideal choice. Once you become more experienced you can always move on to the EUR/USD or GBP/USD pairs, for instance, which are far more volatile and have greater daily ranges.