Can Anyone Explain This Chart?

Hi,

I seen this yesterday on cable prior to FOMC mins meeting. Cable showed strength while Cable against the yins showed weakness, but significantly the yin moved well before the GBP/USD at 9.24pm BST time cable showed price stalling ready to pick a direction at that time while the yins shot down 32 pips while nothing major happen on the GU? Now why is this does this give me confidence if going long on cable that the yins buy orders are being distributed on GU?

I think some people call it fractional disparity not many people know about it.

http://i50.tinypic.com/6ye62a.jpg







Thanks.

Simples. This was a yen move, not a pound move. All yen pairs collapsed /at least all those I had a peek at/. It's useful to look at multiple charts to get a better idea what's going on, and where.

Not the answer I was looking for but its seems odd that a GU/GJ pair suddently moved in opposite directions after the FOMC speech?

Only time will tell with experience but I once I heard a trader state that market makers grab orders on yen pairs and distribute it on majors and vice versa usually the majors as majority of people trade and lose money and its harder as well with whipsaws. The amount of times i have seen GU whipsawing and ranging and beautiful trends on the yens is surprising no one teaches it.

When trading the crosses you need to take three pairs into consideration - in this case GBP/JPY, GBP/USD and USD/JPY.

Further, as GBP/JPY = GBP/USD * USD/JPY, the change in GBP/JPY can be calculated as

(GBP/JPY)_2 - (GBP/JPY)_1 = (GBP/USD_2)*[(USD/JPY)_2 - (USD/JPY)_1] + (USD/JPY)_1*[(GBP/USD)_2 - (GBP/USD)_1]

which explains how trends or sudden moves in USD/JPY reflect in the cross pair.