Spread between GBP/USD and EUR/USD is at high rate right now. Since Brexit 2016 the spread between these two has been between 0.1 (18th March, 0.07093).and 0.2 (14th February, 0,22174). In this strategy you bet money on the decrease of spread between these two currencies. GBP/USD and EUR/USD are correlated = 0.81 This means that they will most likely move together. In this trade we go long on EUR/USD and short on GBP/USD. If the EUR/USD will rise it should rise much more than GBP/USD. If GBP/USD falls it should fall much more than EUR/USD. The spread between these two needs to go down in this moment to be profitable.
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