The GBP/USD (British Pound-Dollar) currency pair is one of the most traded and popular currency pairs in the Forex market. GBP - Great Britain Pound. The pound sterling is the official currency of the UK and is the oldest currency still freely used in both cash transactions and large financial transactions.
Pair GBP/USD attracts traders by the fact that it has high volatility (sharp and strong movements). Therefore, it is not surprising why pipsing is so popular when working with this pair. Most traders agree that this pair largely repeats the movements of the EUR/USD pair. There is some truth in this (see the charts below), but it often happens that the movements of pairs drastically diverge. Therefore, be very careful with this pair.
It should be noted that this is a reverse quoted pair.
On the charts below, you can see how the GBP/USD pair does sometimes repeat the movements of the EUR/USD pair.
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For beginners, this pair is not recommended. Again, because of its high volatility and often, unpredictability. Indicator signals on this pair can easily mislead a novice trader, as often the signals turn out to be false.
Sometimes you can hear such a name for this currency pair– “Cable”. Once, in the 30s of the twentieth century, quotes were transmitted over a cable laid along the bottom of the Atlantic Ocean and connecting North America with the UK. Since then, this nickname has stuck with this couple.
Factors affecting the GBP/USD pair
The GBP/USD pair, like any other currency pair, is influenced by a huge number of factors. The tables list the main and most influential factors.
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English factors |
American Factors |
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Interest rate statement |
Interest rate statement |
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Retail sales (MoM) |
Federal Committee Statement |
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GDP (QoQ) |
Change in non-rural employment |
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Bank of England inflation report |
Change in non-agricultural |
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Change in the number of unemployed |
Unemployment claims |
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The impact of the EUR/USD pair |
Index consumer prices(MoM) |
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RICS House Price Balance |
GDP (QoQ) |
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Speech by the Governor of the Bank of England |
Fed chairman's speech |
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Political situation |
Political situation |
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emergency |
emergency |
For successful work with this currency pair, experience in the Forex market is required. Therefore, if you are just starting to take the first steps in this direction, the GBP/USD pair will not the best choice to start. Although it is possible that this particular pair will best suit your trading style.
Hello everyone!
Friends, today is another fundamental topic in which we will analyze such a popular trading tool as the GBP/USD currency pair, consider the main characteristics and features of trading on it, outline the events that dramatically affect the change in its rate, as well as options for optimal trading on this currency instrument .
The currency pair pound dollar is quite common in the Forex market. The third line in popularity is another evidence of this. Of the total turnover, its volume is about 12%. That is why the knowledge of the specifics of the behavior of this financial instrument, the most favorable time periods for trading, is of particular importance, all the more so.
In this instrument, the base currency is the British pound (GBP), and the quote currency is the US dollar. That is, if its rate rises, then the pound strengthens, and American dollar losing ground at the same time. The quote of the pair is direct and replenishes the group of "majors", this instrument for most brokers - from 3 pips.
The Pound Dollar currency pair is considered one of the most aggressive in the Forex market. The pound, being quite heavy, provides with its participation, in particular, the GBP/USD pair, strong volatility. Her behavior is quite unpredictable and remarkable false breakouts.
The volatility of the pound dollar per session can reach up to 130 points. Especially often this pair is traded in the European and American. As a rule, London trading sessions are particularly dynamic and active. The lowest liquidity for this pair is observed in the Asian session, on average, about 30 points. Therefore, it is preferable for beginners to trade during this time period.
This financial instrument is of greater interest to traders focused on "high-speed" operations, i.e. , since the high volatility of the pair allows you to make short-term transactions during the day, aimed at quick profits.
Today, the gbp usd currency pair is of great interest to traders, although many of them, nevertheless, prefer . As for its relationship with other currency pairs, they can be said to be rather vague. At first glance, it seems (by the way, sometimes they think so) that this pair has a direct correlation with EUR/USD and a negative one with . In other words, GBP/USD is moving parallel to the euro dollar, duplicating the dynamics of its movement, and with the growth of the pound dollar currency pair, we should expect the opposite pair, i.e. USD/CHF, down.
But this impression, as a rule, is deceptive: the directions of movements can differ quite sharply, especially during the release of specific “cable” news (“cable” is the slang term for the GBP). For example, traders should pay special attention to events about the British government.
In addition, if the behavior of the euro is quite predictable, then the pound, unlike it, may not react to incoming news, go against them, fall rapidly in the course, although the external market situation is stable.
The catalyst for the movement of the GBP/USD, most often, is the UK macroeconomic data. The exchange rate of a currency pair is influenced, in particular, by the following factors: the general trend towards foreign exchange market and the difference (differential) in interest rates between the British pound and the US dollar. Its great value allows many traders to receive additional income when trading this currency pair on swaps.
For understanding, I will give an example of such an interesting but already archival event: last change UK interest rate occurred in 2009 (more precisely March 5, 2009):
This event shook the pound, which quickly fell by 350 points, below is a screenshot of the reaction of the pound dollar currency pair on the price chart.
Higher interest rate allows us to consider the pound a highly profitable currency. Although its high volatility makes it possible to successfully use the pair for short-term and medium-term trading, however, some traders consider the GBP USD currency pair as a tool for long-term investment (as an example, the situation described above).
At the same time, the trading plan takes into account the scale of its volatility, it is rational to make transactions in small volumes, be sure to use stop loss orders at large distances from the open position.
Also, I’ll get ahead of myself, in the next article, in addition to interesting material about one of the trading tactics, there will also be a “bonus” crossword puzzle with the opportunity to receive a gift - unique for improving trading in .
So don't forget subscribe to update site, so as not to miss the publication of the article.
Sincerely, Alexander Siver
In our GBP/USD Forecast section, we offer forex traders a forecast of the Pound/Dollar (GBP/USD) exchange rate for today as part of the analysis current situation on the FOREX market using simple analysis tools.
GBP/USD technical analysis
As part of the pound forecast, we offer daily free technical analysis British pound to the US dollar on FOREX. Trend lines are used here, graphic models, as well as modern approaches in the form of a pattern based on Fibo levels, due to this we get a qualitative technical analysis of the GBP/USD.
FOREX GBP/USD forecast for today
As part of the publication of forecasts, we also offer traders trading recommendations and signals from the experts of our portal, if you constantly follow the updates of the gbp / usd forecast section, you have already noticed that movements often occur immediately after the publication of forecasts for the pound dollar for today.
GBP/USD forecast for tomorrow
Thanks to the analysis of the four-hour chart of the pound dollar currency pair, we make a forecast of the GBP/USD exchange rate for tomorrow, which is also relevant for this moment time. As a rule, the GBP/USD forecast for tomorrow is published in the afternoon, taking into account the morning trading session and right before the most aggressive American one.
GBP/USD (pound/dollar) is the second most popular currency pair after EUR/USD (euro/dollar).
About 10-14% (12% on average) of all transactions are made with GBP/USD. financial transactions on the market. In order to understand the nuances of working with this currency pair, you need to know such concepts as:
1. Time period of maximum activity. This is a period when a large number of transactions are made on the market with a particular currency pair. Here you need to understand that any currency is in demand during a particular trading session (British, Asian, and so on);
2. Volatility. These terms denote the range of fluctuations in different time periods for each currency pair. High volatility = high oscillation frequency. Accordingly, a low indicator indicates that the currency is “calm”;
3. . Translated from Latin, this word means “relationship” or “correlation”. And here it is worth understanding that currency pairs move together (sometimes with a slight delay due to lags).
There are opponents and there are allies. Enemies move in opposite directions from each other, while allies move together. This parameter is not 100%, otherwise trading on the exchange would be too easy.
Despite this, every trader should be aware of the ratio of currency pairs to each other.
Important! Currency pairs are often referred to as assets.
Novice traders cannot work with multiple pairs, as each currency requires a separate strategy. Even forex professionals often only trade EUR/USD. This is due to the fact that this pair is the most calm - it is practically not affected by political and economic events.
Characteristic
First you need to know the basic parameters of the currency pair. So, the characteristic of GBP/USD:
- maximum activity is observed during the European and American sessions;
- minimal activity during the Asian session;
- high volatility, the currency pair is characterized by jumps of 120 points;
- inverse correlation with the EUR/GBP pair.
Important! There is also a correlation with USD/CAD. As a rule, when the pound rises against the dollar, USD/CAD, on the contrary, falls. V this case an inverse correlation is observed, but it does not always manifest itself.
By the way, it is a mistake to believe that GBP/USD duplicates the movement of EUR/USD. In fact, these pairs are practically not interconnected. It should be recognized that coincidences in the movement of these assets occur frequently.
But the rate of the pound against the dollar can change very sharply, with the advent of news from the world of the economy, which cannot be said about the euro against the dollar.
Correlation is a weak indicator that often fails inexperienced traders. Despite this, the relationship between currency pairs needs to be known and taken into account, since it often turns out to be true.
Assets interact with each other and influence each other's movement. But even the most experienced trader cannot always predict how allied or adversary assets will move.
GBP/USD chart
Why GBP/USD should not be chosen by beginners?
Roughly speaking, trading this asset with no experience, you can lose all the invested funds.
The currency pair is unpredictable, which is largely due to false breakouts that occur due to sharp movements in the pound. Moments like this need to be tracked.
To successfully trade GBP/USD, you need to have a proven trading system.
On the screen you can see how volatile this asset is:
Important! On the other hand, during periods of sharp jumps, the currency pair allows you to make good money. Therefore, the high volatility of assets is a minus for inexperienced currency traders and a plus for professionals.
As already mentioned, the cost of GBP/USD may jump by 120-200 points, which will lead to fluctuations in other currency pairs.
In the case of the pound / dollar, you need to track daily statistics, since only they will be relevant and correct.
First you need to develop “trading” skills on calmer assets and create a competent trading system.
Important! The GBP/USD is especially active during the periods of the London Stock Exchange operation. This factor must be taken into account.
The pound/dollar pair can rise in price in a few minutes, and then also collapse sharply. In the market, this parameter of assets is called “the propensity for rapid reversals”.
Dependence on political and economic events
GBP/USD is changing under the yoke of various political and economic factors.
Therefore, a trader needs to keep track of all the latest news in order to approximately understand where and how the asset rate will move. The currency pair is influenced by such factors as:
- interest rate in the main English bank;
- consumer/producer price index (inflation in general);
- GDP (gross domestic product or market price services and goods) in the USA and England.
These are just 3 factors that affect the pound against the dollar. It is necessary to track the news on the economic calendar, covering not only England and the USA, but also Canada, the Eurozone.
Political events can also have a strong impact on the value of assets.
Perhaps the GBP/USD is the most “pliable” pair that reacts to the slightest change within specific countries. This is the main feature of the GBP / USD pair, which every trader should take into account.
GBP/USD is a tool for short-term investment
The euro is a fairly stable currency, which cannot be said about the pound. The catalyst for the movement of this currency pair is often microeconomic news from England, to which the pound reacts violently.
At the same time, the asset can go “against” the news, start to fall in price with a seemingly stable economic situation.
Therefore, this currency pair is not suitable for long-term investment. It needs to be sold quickly enough, otherwise you can be in the red. I often trade GBP/USD on a swap (swap, exchange).
Important! In 2009, the pound fell by as much as 350 points due to the fact that the main bank in the UK changed the interest rate.
After that, the currency began to rapidly gain in price: in 3 months it rose by 3500 points.
In this case, you can see how economic news affects the pound and what it leads to.
Many refer to the GBP/USD as a currency pair for scalpers. Scalpers are people who try to capitalize on minor changes. exchange rate. As a rule, they enter into many transactions (from 100) and receive profit from this.
Largely because of the scalpers, the pound/dollar pair is so volatile and unpredictable. As a rule, experienced investors aimed at large transactions bypass this currency pair.
Let's summarize. GBP/USD is an unpredictable and aggressive asset, the movement of which largely depends on microeconomic and political news. It is better for beginners not to mess with this currency pair, as it requires a detailed calculation.
One of the few currency tandems that equally satisfies the interests of pros and beginners in the FX market is the GBP USD pair. When the London Stock Exchange opens, the quotes of this pair are characterized by aggressive movements and high daily volatility. So, during the European trading sessions The pound-dollar can go 150-200 points, which is why it is popular among scalpers and experienced traders.
A smoother dynamics is observed in Asian trading - about 30 points, which allows beginners to hone their trading skills in a more relaxed environment. Such low volatility is due to the time difference between Asia and Europe, which is why during the Asian session there are no news that affect the GBP USD rate, and the price changes under the pressure of supply and demand forces. The Tokyo GBPUSD trading robot, which is available to AMarkets clients for free, is adapted specifically for such conditions.
The pound-dollar pair is included in the group of "major currencies" (majors) and closes the top three most traded currency pairs on the market, second only to ERU USD and USD JPY. In total, the pound-dollar accounts for about 12% of the total volume of transactions. The pair gives high swaps for medium and long-term trading. The current value is presented in this table in the "Swap" tab.
Features of forecasting GBP USD
It is the long-term trends that are clearly visible in the dynamics of the pound, and the short-term forecast does not stand the test of reality. Many beginners are mistaken when they think that the pound repeats the movement of the euro against the dollar. The British currency is not always amenable to fundamental analysis and may not react properly to news at all, while the euro moves most often predictably.
In continuation of the fundamental analysis, we note that the GBP USD primarily reacts to news and macroeconomic releases in the UK. Secondarily, the movement of the pair is influenced by events from the European Union and the United States. In addition, the pound strengthens when oil and energy prices rise. As you understand, it turns out a rather large amount of information that needs to be digested when trading this pair. To help you understand the current news background and find the best trading decision, our chief analyst Artem Deev prepares analytical reviews every morning, in which you can find out the forecast for the pound-dollar pair for today.
Many traders, when trading the pound on FX, prefer to predict the price movement using technical analysis. Considering the short duration of the trends on which you can make money, perhaps only technology is worth looking for. The MACD and RSI indicators will come to the rescue, allowing you to determine the strength of the trend; and the Ichimoku indicator, which will help you find support and resistance price levels; and the Stochastic indicator, which notifies about overbought or oversold conditions in the market, and much more. We publish a technical forecast for the pound-dollar pair based on the indicated indicators on a daily basis on the website. These materials visually present market entry points, as well as key support and resistance levels. Due to its explosive nature and sharp movements, GBP USD quickly breaks through price extremes. So if you need to improve your analysis skills price levels We look forward to seeing you at our free webinar
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