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Forex pairs in this Article » EUR/GBP, GBP/USD
FXstreet.com (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale notes that the recent rise in EURGBP vol left cable vol lagging.

He feels that this s is mostly because the GBP weakened more against the EUR than the USD. In his view, the most likely scenario is a reconnection, with EURGBP vol heading lower and GBPUSD vol converging higher. Galy writes, "EURGBP realised volatility is very toppish, while the cable breaking downward should increase its volatility. We recommend buying a 1M straddle in cable and selling a 1M strangle in EURGBP, on a vega weighted basis. This strategy will generate carry in a range-bound environment, or will benefit from a trend in cable either way."
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