The GBP/USD currency pair presents many excellent profit opportunities to those who trade binary options. This is due to the fact that this pair is one of the most active, experiencing quite a large daily trade volume. This means that trends are likely to occur often, particularly when economic data reports yield unexpected results, but there will be other chances to earn from this pair as well. Consider the following tips for successfully trading the pound and dollar pairing.
British Sterling, or the pound, is the primary currency of the United Kingdom and a few U.K. territories. In terms of overall volume, the pound ranks fourth, with the dollar, euro, and yen being the top three. The currency actually ranks third with regards to global reserves. The main point here is that the GBP, USD, EUR, and YEN are the leading global currencies, and as such, are prime targets for those who wish to profit from their price movement.
Once just a bit of knowledge is gained about the GBP/USD, it will be easy to turn what you know into actual profit. News trading also tends to be quite easy with this pair, as there are several reports that will impact values. Among the most important is the UK Inflation Letter, which provides a forecast for how inflation is expected to rise or fall in the coming months. This letter also outlines past and current economic conditions, along with how these may change in the future. Whether positive or negative in wording, this letter will impact the value of the pound for a period of time.
Similar reports should be monitored in the U.S. as well. Interest rate changes, employment data, housing data and more will impact the value of the dollar. Keep in mind that trading currencies within a binary options platform is the same as trading traditional Forex in that the goal will still be to see which currency will perform better than the other. For this reason, data from both countries will need to be closely monitored prior to executing a trade.
The GBP/USD pair often trade in a tight range, which can make price movement prediction a tough task at times. Although there are clearly fundamental differences, the United States and United Kingdom are similar in many ways. It is possible that one piece of data could support or drag down the value of both currencies. A prime example is crude oil, which at the time of this writing is performing extremely poorly. Both the U.S. and U.K. markets are being negatively impacted by falling oil prices.
Both the pound and the dollar are widely reported on, so there will be plenty of information available about this pair each day. Technical analysis will be a must, as this pair does tend to be quite volatile at times. There will be times when the pair is flat, so don’t shy away from instruments such as Boundary when prices are range-bound. Brisk price movement may also present several profit opportunities each day using short-term expiry times. The opportunities are virtually limitless, but success will only come to those who monitor the latest reports for each country.