Sean Hyman
Contributing Writer
instructor@mywealth.com
For years and year, whatever direction the euro went, the pound tagged along and vice versa. This produced a wide trading range for the last 30 years. However, we live in a new day today as we break through those historic highs this month!
Check out the chart below.
30 Year Highs are Taken Out! Will we reach parity?!?
There’s been a power struggle since the advent of the euro!
You know, many years ago when the euro came into existence, there was a “power struggle” between the U.K. and the test of Europe. The Brits wanted the pound to be listed first in the pairing (GBP/EUR) and others wanted the euro listed first (EUR/GBP).
So I love what Reuters did. When they started quoting it, they quoted it both ways. They decided they would let the market decide which way it wanted it listed.
Well, it wasn’t long before most of the volume and demand for quotes was on the EUR/GBP side. So the “masses” voted so to speak and therefore we only have it quoted that way to this day.
Well the same has played out in the markets. The euro (which is basically tracked by the old D-mark from Germany before the advent of the euro) and the pound have battled it out inside an extremely wide range for the last 30+ years. However, just this month (as seen by the monthly candle to the far right), the euro rose while the pound fell and between the two massive movements, it busted through a 30 year resistance line (red).
So we continue to live in days that continue to make history. With the EUR/GBP trading near .9500, it’s within reach of 1.00. Could it really happen? Sure!
Keep an eye on this one to see if one euro will shortly equal one pound. Wow!
I hope you have a Merry Christmas and a prosperous New Year!
Sean Hyman
Head Instructor
