Sterling v the euro: a great trading vehicle for spread-betting

This GBP/EUR trade illustrates how an observant trader can win against the big boys, simply by using basic technical analysis tools and reading market sentiment.

One of the few non-dollar currency crosses I like to trade is the GBP/EUR (sterling versus the euro). It is has a very large following, and it behaves itself as well as any currency cross with regard to the technical analysis methods I use. Spreads offered by most spread-betting firms are usually very tight, which means it is cheap to trade.

Because the eurozone is the UK's biggest trading partner (taking about one half of our exports), the cross rate is of great interest to commercial firms of all kinds. The profits of such firms are heavily dependent on this rate, and there is much hedging of currency risk to attempt to protect profits. Getting the forecast wrong can be very expensive.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.