A nice correlation trade is setting up between EUR/GBP & EUR/JPY . The spread in the correlation is currently 400 Pips, over the past year the max spread has been approximately 500 Pips. This pair has a correlation of 70% over the past year and 88% over the past 6 months.
We will be taking 1/2 our intended position size, if the spread continues to widen we will slowly add to our position. There is a good chance we see that happen over the next few days as the Great Britain, Eurozone & Japan all have economic news scheduled this week. If our timing happens to be accurate and the spread begins to narrow before that data is released we will book our profit.
*Remember 1 Pip move EUR/GBP is equivalent to 1.5 Pips so you must reduce your size in EUR/GBP .