Originally Posted by
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You may want to know that the price of GBP/JPY is equivalent to the price of GBP/USD multipled by the price of USD/JPY or
GBP/JPY = GBP/USD x USD/JPY
The G/J will proceed alot when there is a carry trade trending market, either winding or unwinding.
In a winding market, the $ is weakening versus the GBP and stengthening vs. the JPY. 40 pips of winding will be worth 127 pips on the G/J.
Do not bother investing the G/J at a $ dominated market, such as following a US news report. When the $ is moving the exact same way vs GBP and JPY, the G/J can go either way, depending on how fast it's moving on either. Most times at a $ market-you will benefit about the exact same about the G/J as others, but you are going to pay alot longer in the spread.
100-120 pip moves are common for the G/J. In present market conditions when equity markets do well, long the G/J on the drops. If you long it at there and you find the $ strengthening vs. the GBP and weakening vs. the JPY-turn the position around.