All about GBPUSD

The GBPUSD it is one of the most popular and widely traded trading instruments on the Forex market. Due to its high liquidity and high volatility, it offers opportunities for day or intraday trading. In this article we will see the GBPUSD and we will give valuable advice for successful operations.

Currency Summary

The British pound is the main currency pair that represents the currencies of the two largest economies in the world. The quoted currency is the US dollar and the base currency is the British pound.

Interesting fact:
Many forex traders refer to the pair GBPUSD like a “wire”.

The coins are come seriously affected by economic reports such as GDP, employment reports, inflation, etc. However, central bank activity is one of the most important factors in currency volatility and price direction. This applies both to decisions made by the Bank of England and to the units of the Federal Reserve System responsible for decisions on interest rates. From a historical point of view, the pair GBP/USD it has been operating since the early 1970s, when both the UK and the US switched to floating exchange rates.

The best time to trade

The average daily volatility of cable is large enough to take advantage of short-term price trends.
Also, the currency pair is very stable and suitable for both technical and fundamental traders.
The best time to trade GBP/USD that’s when the sessions in London and New York overlap. At this time, the maximum trading volume is observed. The spread during this period will be the narrowest, which means the least slippage in the trade.
The window to trade between the London and New York sessions is between 8:00 and 12:00 ET. The second best time to trade is the opening hour of the London session, that is, the interval from 3:00 to 4:00 Eastern time. Most of the European markets are trading right now, so this pair has a lot of trading volume.

Five economic data that affect the exchange rate:

First of all, these are reports on the GDP of the United Kingdom and the United States. Typically, initial GDP estimates have the biggest impact on the price of currency pairs as they are released earlier, giving traders a preliminary assessment of the country’s economic state.

The second type of information is related to monetary policy. In particular, the reports and decisions on interest rates published by the Bank of England and the United States Federal Reserve System.

Trade balance indicators. As a general rule, the trade balance shows how much capital enters the country and how much is withdrawn from it. As a general rule, an increase in the trade surplus is considered a sign of a healthy economy, while a trade deficit is not considered such a favorable event.

The operators of GBP / USD They should pay close attention to the unemployment rate in the United States and Great Britain. Essentially, the unemployment rate measures the percentage of the total labor force that is unemployed but currently looking for work.
Obviously, the higher the unemployment rate, the greater the damage to the entire economy.

Inflation indicators. This includes the consumer price index and the producer price index. The consumer price index measures the inflation of a basket of goods and is considered an index of inflation at the consumer level. The PPP measures inflation at the producer or wholesale price level. Both indicators of inflation provide important information about potential long-term price trends. However, the Producer Price Index is considered a leading indicator and therefore may be more useful in predicting the next price trend.

Correlation

The GBPUSD it can often move simultaneously with other major currencies, especially the Eurodollar pair, and can often rely on other major currencies in the opposite direction.
The correlation can exist in different time frames, including four hours, eight hours, or the entire day. Furthermore, these correlations are dynamic and can change over time.

trading strategy

The strategy is called the Big Ben strategy. In fact, this is a strategy to break out of the opening range of a currency pair. The logic of the strategy lies in the change in volatility volume, which tries to restore the initial price movement after the Japanese session. In particular, the trading volume of the GBP/USD decreases significantly after the end of the New York session and then during the Asian session.
Therefore, most of the big institutional traders will not trade before the start of the European session. This usually leads to market fluctuations within the range of the currency pair. GBP/USD during the night period. Therefore, when the currency pair starts to increase in trading volume at the beginning of the European session, it is possible to trade by breaking out of the opening range. Since interbank sellers create a range on both sides of the market during the opening period, a potential breakout from the range usually leads to a phase trend at the beginning of the trading session.

Rules for a long entry using a game of Big Ben with five minute candles:

Plot the range of high and low prices between the Frankfurt Open Championship and the London Open Championship. This is defined as the opening interval.
Price action during this period should be limited to a range of
Enter the breakout and close above the 38% range extension level.
The stop loss should be set in the middle of the opening range.
The take profit will be equal to twice the length of the opening range measured from the breakout point.

Rules for short entry with a game of Big Ben with five minute candles.

Plot the high and low price range between the opening in Frankfurt and the opening in London. This is defined as the opening interval.
Price action during this period should appear range bound
Enter the breakout and close below the 38% range extension level.
The stop loss should be set in the middle of the opening range.
The take profit will be equal to twice the length of the opening range measured from the breakout point.

Curriculum vitae

Now you know what news to follow to trade GBPUSD profitably.
In addition, you know the best time to trade and even the trading strategy.
The GBPUSD it is a very volatile pair, with proper trading it can bring you a quick profit.
But do not forget about the risks.
Stick to the strategy!

Good luck!

Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I’ll be happy

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