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Chunnel

Desk slang for EUR/GBP, named after the Channel Tunnel linking the two economies.

EUR/GBP is the most watched European cross-rate, used by companies trading across the Channel and by traders expressing a view on the Bank of England against the European Central Bank without a dollar leg.

It moves in a narrower range than the dollar pairs, because the two economies share shocks. A common tactic is to watch cable and fiber for the dollar's direction and the chunnel for the genuinely European story.

Example: EUR/GBP moves from 0.8490 to 0.8540, 50 pips. On one standard-lot that is GBP 500, roughly USD 635 at GBP/USD 1.2700. See pip-value-cross-pair.

Related: cross-rate, euro-cross, cable, pip-value-cross-pair

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

A range beside a trendOne chart swinging between a flat floor and ceiling, another stepping upwards inside a pair of sloping lines.Range-boundresistancesupportprice bounces between two levelsTrendingthe trend channelhigher highs and higher lowsA range has two flat edges; a trend has two sloping ones.
Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.

Educational only, not advice. Spotted an error? Post in Site Feedback.