EURGBP: the pair that actually respects levels

[Fairman]

EURGBP: the pair that actually respects levels

Traders often describe EURGBP as the most technical of the major crosses, and there is a reason. It lacks the heavy flows tied to the dollar, and it spends long periods ranging between levels that were set months ago.

Support and resistance zones hold unusually well, mean reversion setups work more often than on dollar pairs, and the typical day is a quiet range with a few small excursions.

The trouble is the spread. At two to three pips normally, it eats a large share of a typical scalp's profit. Strategies that look beautiful on the chart struggle once costs are added.

It also tends to break out in a hurry when UK or eurozone news shifts the balance. A range that held for weeks gives way in a few minutes, and fading the edge becomes dangerous.

For patient traders, it is a good pair for slow setups with wide targets. For hit and run scalpers, the cost structure makes it a poor choice.

Many EURGBP traders also pay attention to the Bank of England and ECB calendars together, since the relative path of two central banks drives the pair almost entirely. A quiet week for both leaves it in a range. A surprise from either breaks it.

Has a technical pair like this stayed profitable once real spreads were included?