Using the GBP/JPY to trade U.S. news? | Forex Factory

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Using the GBP/JPY to trade U.S. news?

  • #1
  • First Post: Sep 4, 2007 1:29pm Sep 4, 2007 1:29pm
Hi,

I've been primarily trading the GBP/USD. It has been an excellent pair to trade. Lately, however, I've been observing the GBP/JPY and have been fascinated by it's massive movements. 100-200 pips, depending on the news, is common, while movements of over 300-400 (or even more) pips are also prevalent.

Today, on the US ISM report, the GBP/JPY went up 90-100 pips. I also looked back a few months and seems that the pair also responds to U.S. news.

In addition to the GBP and JPY news, would it be a good idea to trade the GBP/JPY using the U.S. news as well?
  • #2
  • Sep 5, 2007 1:00pm Sep 5, 2007 1:00pm
Quoting saxytrader
Hi,

I've been primarily trading the GBP/USD. It has been an excellent pair to trade. Lately, however, I've been observing the GBP/JPY and have been fascinated by it's massive movements. 100-200 pips, depending on the news, is common, while movements of over 300-400 (or even more) pips are also prevalent.

Today, on the US ISM report, the GBP/JPY went up 90-100 pips. I also looked back a few months and seems that the pair also responds to U.S. news.

In addition to the GBP and JPY news, would it be a good idea to trade the GBP/JPY using the U.S. news as well?


I'm not sure about that.. GBP/JPY would move with the US news if USD/JPY and GBP/USD did not move by equal % amounts during the news. Does this happen often, is there any pattern to it ?
  • #3
  • Sep 5, 2007 9:02pm Sep 5, 2007 9:02pm
it happens all the time

gj is the most volatile pair for carry trades and carries are very sensitive to us news

read newstraderfx posts here and you'll learn a lot about it

http://forexfactory.com/search.php?searchid=2040033
"Nothing is unexplainable, Everything is mystery" W. Liquorman
  • #4
  • Sep 5, 2007 10:01pm Sep 5, 2007 10:01pm
There is a radio show also n this person gives instant analysis on the market he is really good. His name is Andrew Spanton and he has this Radio show live in the US session. Global forex radio is the shows name. Great stuff .

http://globalfxradio.com
  • #5
  • Sep 6, 2007 6:00am Sep 6, 2007 6:00am
Quoting eyecelll
gj is the most volatile pair for carry trades
I must disagree with that statement. NZD/JPY is much more volatile than GBP/JPY. During the last carry unwind NZD/JPY fell by around 24%, whilst GBP/JPY fell by around 13%. I suspect it will remain this way as long as there is such a large difference between the rates of these nations.

I will check out that link, thanks.

added, that link doesn't work.
  • #6
  • Sep 6, 2007 10:38am Sep 6, 2007 10:38am
it works perfect for me i use it everyday .

may be u want to add www.globalfxradio.com
  • #7
  • Sep 6, 2007 12:26pm Sep 6, 2007 12:26pm
Thanks for the link. I was listening to it for a few minutes and it seems to contain a lot of pretty good info. Do they have a show on the weekends? That would probably be the best time for me to listen to it.

As for the gbp/jpy, it did make another move today on the release of the U.S. ISM non-manufacturing report (80-90 pips). I'll probably observe and collect data for this pair until I get a solid "feel" for it.
  • #8
  • Sep 7, 2007 11:16am Sep 7, 2007 11:16am
they have a weekly show which is week ahead at 5pm est on sundays

everyday they have a wrapup show at 4 pm est great analysis. Technical n Fundamental together.
  • #9
  • Sep 8, 2007 9:52am Sep 8, 2007 9:52am
Quoting peterM
I must disagree with that statement. NZD/JPY is much more volatile than GBP/JPY. During the last carry unwind NZD/JPY fell by around 24%, whilst GBP/JPY fell by around 13%. I suspect it will remain this way as long as there is such a large difference between the rates of these nations.

I will check out that link, thanks.

added, that link doesn't work.
you're right, what i meant to say is that gj makes the biggest moves in pips and therefore is more preferable for trading, at least for me
"Nothing is unexplainable, Everything is mystery" W. Liquorman
  • #10
  • Sep 8, 2007 5:46pm Sep 8, 2007 5:46pm
Quoting eyecelll
you're right, what i meant to say is that gj makes the biggest moves in pips and therefore is more preferable for trading, at least for me
Fair enough :-)
  • #11
  • Sep 8, 2007 9:55pm Sep 8, 2007 9:55pm
Quoting eyecelll
you're right, what i meant to say is that gj makes the biggest moves in pips and therefore is more preferable for trading, at least for me
Definitely true. Friday's U.S. nonfarm payroll confirmed this with an amazing move of 300 pips! This also confirms that we may probably use U.S. news to trade this pair (Im starting to get very excited ).
  • #12
  • Sep 10, 2007 12:30am Sep 10, 2007 12:30am
Wow, this is awesome.. Im going to record some charts during news events this week and see how the reaction is.. You've sparked my interest in this that is for sure!

Quoting saxytrader
Hi,

I've been primarily trading the GBP/USD. It has been an excellent pair to trade. Lately, however, I've been observing the GBP/JPY and have been fascinated by it's massive movements. 100-200 pips, depending on the news, is common, while movements of over 300-400 (or even more) pips are also prevalent.

Today, on the US ISM report, the GBP/JPY went up 90-100 pips. I also looked back a few months and seems that the pair also responds to U.S. news.

In addition to the GBP and JPY news, would it be a good idea to trade the GBP/JPY using the U.S. news as well?

  • #13
  • Sep 10, 2007 12:44am Sep 10, 2007 12:44am
One thing that Im noticing, and Ive heard it before, is that the GY follow the UY instead of the GU. Can someone confirm this? Actually, I confirmed it by the charts im going to attach, but I want to make sure my statement is validated.

Cheezehead

Quoting saxytrader
Hi,

I've been primarily trading the GBP/USD. It has been an excellent pair to trade. Lately, however, I've been observing the GBP/JPY and have been fascinated by it's massive movements. 100-200 pips, depending on the news, is common, while movements of over 300-400 (or even more) pips are also prevalent.

Today, on the US ISM report, the GBP/JPY went up 90-100 pips. I also looked back a few months and seems that the pair also responds to U.S. news.

In addition to the GBP and JPY news, would it be a good idea to trade the GBP/JPY using the U.S. news as well?

Attached Image(s) (click to enlarge)
Click to Enlarge Name: UY-NFP-9-7-07.jpg Size: 141 KB
Click to Enlarge Name: GU-NFP-9-7-07.jpg Size: 150 KB
Click to Enlarge Name: GY-NFP-9-7-07.jpg Size: 155 KB
  • #14
  • Sep 10, 2007 6:01am Sep 10, 2007 6:01am
ya.. gbp/jpy moves more pips than most pairs, but it moves similar to usd/jpy in percentage terms. So if you were using proper risk management, most of the time you would need to use small lot sizes to accomodate the large pip movements.

Quote
One thing that Im noticing, and Ive heard it before, is that the GY follow the UY instead of the GU. Can someone confirm this? Actually, I confirmed it by the charts im going to attach, but I want to make sure my statement is validated.
Yeah, GBP/JPY has more correlation to USD/JPY than GBP/JPY. The dollar usually holds up a bit better during the carry unwinds though.
  • #15
  • Sep 10, 2007 6:23pm Sep 10, 2007 6:23pm
The U.S. Trade Balance report is coming out tomorrow. This will be a great time to experiment on this GBP/JPY. Fed Chairman Bernanke will also talk tomorrow, but I do not expect him to state anything that will cause the markets to move. But of course, he may announce a surprise, so always be ready for the unexpected.
  • #16
  • Sep 13, 2007 1:07pm Sep 13, 2007 1:07pm
Wow, the U.S. trade balance report didn't make the gbp/jpy move. At the same time, the majors did not move as well. Talk about a slow day..

There seems to be one more day of critical U.S. news...the retail sales on Friday. Perhaps, this may be a charm to the market? We will see...

By the way, does anyone know what news triggered the 276 pip move earlier today on the gbp/jpy?
  • #17
  • Sep 13, 2007 2:28pm Sep 13, 2007 2:28pm
I was curious to what the spread widened to during the news release?
It is already at 9 or 10 on IBFX.
That had to be a huge spread for a the couple minutes during the news.
Not something you would want to get into for less than 5 min or so.

but...I will be watching it...
  • #18
  • Sep 13, 2007 2:55pm Sep 13, 2007 2:55pm
I see what everyone is saying here but surely it's how much each pip is worth not how many pips the pair moves?
  • #19
  • Last Post: Edited 2:06am Sep 14, 2007 1:50am | Edited 2:06am
Quoting jimbo61
I was curious to what the spread widened to during the news release?
It is already at 9 or 10 on IBFX.
That had to be a huge spread for a the couple minutes during the news.
Not something you would want to get into for less than 5 min or so.
Quoting purenirvana
I see what everyone is saying here but surely it's how much each pip is worth not how many pips the pair moves?
An FXCM representative told me it is usually 7 pips and no more than 8 during the news. Sure, it is a big spread, but compared to the majors, it has a much more advantageous risk/reward ratio.

Good point, purenirvana, about the pip value. On the GBP/JPY, for a 1 lot standard, it is $8.70. Much less than some of the majors, but it still provides a better source for opportunities, for it has a much higher daily average. Here's an example:

Let's say you traded the U.S. nonfarm payroll on the EUR/USD & GBP/JPY last week on the 7th. On the EUR/USD, it went up 137 pips. That amount equals $1370 for a 1 lot standard. On the GBP/JPY, it went down 400 pips. For the same lot standard, that would equal $3480.
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