Learn to trade USDGBP in binary options trading

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How to Trade USD/GBP in Binary Options

Updated on: 6 January 2020

The USD/GBP currency pair, also called the “Cable”, represents some of the most important economies in the world.

Generally speaking, this currency pair is a little volatile, and people who love large price variations often prefer to trade the USD/GBP over several other currency options. It should therefore come as no surprise that this currency pair is also one of the most traded financial assets in the world.

In this guide I will be teaching you how to trade USD/GBP in binary options.

Factors Affecting the Movement of the USD/GBP

Obviously, what is happening in the UK and the US will affect the behavior of this currency pair the most. In the US, the announcements made by the Fed (Federal Reserve) will often have the greatest impact on the dollar.

In the case of the UK, the BOE (Bank of England) usually has the greatest influence on how the pound changes its value over time. Consequently, as you trade the USD/GBP in the binary options market, it is important to have your finger on the pulses of these economies by following important news releases closely and in a timely manner.

The best approach is to have some knowledge of each country’s economic calender so that you know when to expect significant news items. There are usually time lines indicating when the next significant news reports will be released.

And experts will usually have approximate figures and opinions on what these reports will be like. All this information will be important as you trade this currency pair because at the end of the day, expectations are what determine what direction a currency’s value will go.

These financial bodies will release information detailing how the economies are doing with regard to employment, various market indices, GDP, inflation rates and the like. The decisions they make regarding the economy, for instance with respect to the monetary policy or interest rates will also cause notable movements in the value of each country’s currency.

It should also be pretty obvious by now that this currency will be most active during the European and the US sessions. News releases such as the NFP (Non-Farm Payrolls) data from the US and job growth data from the UK cause the most significant short term movements in the price of this currency pair during these trading sessions.

The Euro also Matters

Another thing to watch out for is the behavior of the euro. Although the UK has always opted to avoid using the euro; and has recently decided to separate itself from the region economically, it is still strongly linked to the economic happenings of the region.

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Consequently, you can expect that certain economic changes in the Eurozone will spill over to the UK and have some noticeable effects on the pound. The UK is a major EU trading partner, and that means that the two economic powerhouses are somewhat linked.

So, it might not hurt to follow the euro in order to have a better insight into the way the pound will behave. Major economic issues in the EU tend to affect the UK; and this is reflected in form of inflation rate changes, and changes in the labor market or the manufacturing industry among other key economic markers.

The Impact of UK and Tokyo Sessions

The UK session and the Tokyo session also tend to overlap for an hour (between 0300 and 0400 EDT). And while USD/GBP currency pair has no direct link to the economics of the Japanese yen, the trading activity that typifies the period between 0200 and 0500 EDT can bring with it some interesting price movements in the USD/GBP; and by extension, unique trading opportunities.

The reason for this is simple – nearly half of all forex transactions are processed by the Tokyo and the London trading centers. This frenzy usually results in the USD/GBP pair assuming a definite downward or upward trend. The good thing is that when this trend starts to form, it is usually quite apparent, which means you can use the High/Low binary options to make yourself some money.

If there is one thing the USD/GBP is known for, it is its large aggressive movements; particularly after important news releases. These movements take place over a short period of time, say within an hour or so after the news is released.

Consequently, Range options can work really well in such cases. And if you are more confident about the direction of the price movement based on the nature of the release, you can always use the Up/Down options.

What Works Better for the USD/GBP, Fundamental Or Technical Analysis?

Fundamental analysis is obviously quite important to understanding how this currency pair will behave in the market. Major economic news releases will obviously have an impact on how the price of USD/GBP will change either over the short term or the long term.

Therefore, these news releases can be a good way to find large price movements that can help you make money from Range options. However, in some cases, you might know that a large move is in the offing, but find yourself lacking adequate information to understand whether it will be in an upward or downward direction.

This can happen when the market is experiencing large trading volumes and the bears and the bulls are fighting it out to see who wins. That is where technical indicators can kick in because they can tell you who is more likely to win; giving you an opportunity to take a favorable position in the market using an appropriate binary options contract.

So, even though your trading decisions may exclusively rely on fundamentals like economic data, having a few indicators in your arsenal of trading tools can help you get more out of this currency as a binary options trader.

A momentum indicator, for instance, can help you know whether the market is being bearish or bullish, and this can help you make better trades or even avoid potentially unsuccessful trades.

Find Your Own Style

Of course, when it’s all said and done, you have to try various trading styles and establish with certainty what works for you and what doesn’t. As with any other trading situation, success with the USD/GBP pair will only come after you have found a strategy that works for you; and that comes down to having a strategy that you can faithfully follow until you can achieve the monetary rewards it has in store for you.

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Binary options signal trading is one of the most rewarding concepts developed in the options trading industry. With the help of binary options signals, traders will have the possibility to use software in order to.

Trading GBP/USD

Trading the GBP/USD in the binary options market is not rocket science. It is a currency asset and just like other currency assets, it can be traded via technical analysis and fundamental analysis. In this article, we will show you how to use one or two fundamental analyses to produce trade results that work all the time specifically for the GBP/USD.

Trading GBP/USD Binary Options: Trade Setup 1

One of the ways to trade GBP/USD binary options is to use a fundamental news release specific to the GBP/USD, which is the UK Inflation Letter. This is a news release which is a letter written by the Bank of England Chairman Stephen King, to the House of Lords in England about the state of inflation in the UK and how this will affect the UK economy in the months to come.

In order to understand the fundamental basis of trading this news release, we need to look at how this piece of data has affected the value of the GBP/USD in the last few years, and the fundamental basis for this effect. In the last four years, the UK Inflation Report has not been favourable to the British Pound. The United Kingdom had its fair share of the housing market bubble which saw the government takeover one of the UK’s biggest mortgage lenders, Northern Rock. Over time, the economic contagion spread to the Eurozone which has now been shown to have been the economy that has been hardest hit by the global financial crisis. While the UK elected to stay out of the Eurozone and preserve its currency unit, the fact that the EU is the UK’s largest trading partner means that the UK has not been insulated from the economic happenings of the EU. It is a case of one person sneezing and the other catching a cold. This has left the inflation rate at all-time highs in the UK, and has meant that the UK economy has taken a beating from the EU woes.

The fact is that until the EU economy starts to show real signs of improvement, we will not see a favourable UK Inflation report for some time to come. This report is released quarterly and can be seen live on Bloomberg TV as it happens, giving the trader time to play this out on his binary options platform.

The Trade

The preferred trade for this report is a High/Low (Up/Down or Rise/Fall) trade. Obviously the bias would be for a Low (Down, Put, or Fall) outcome. Get to your trading platform five minutes before the start of the press conference, and immediately execute the option. The market price on entry is the price barrier. Set your trade expiry to anything between 15 to 30 minutes. We took this trade the last time it occurred and we got the result we were expecting. You can see the summary of this trade on the charts below.

Trading GBPUSD Binary Options: Trade Setup 2

Another market data release that greatly impacts the GBP/USD is the UK manufacturing data. This is a monthly release. This trade is not as straightforward as that of the Inflation Report. This is because the numbers vary; sometimes it is good and sometimes bad for the GBP. As such, you have to wait for the release of the news to the market before making a decision. To be on the safe side, it is preferable to trade a price barrier away from the direction of the news release as a No Touch trade.

Please practice these on demo before applying the strategies to a live account.

7 Binary Options

https://7binaryoptions.com/ The GBPUSD is a particular pair to trade since it seems to work in its own way. It is often referred to as “cable” for many reasons.

The Major GBPUSD Currency Pair

As the US, the British economy is also one of the top three economies in the world. The strengths of their economy are reflected as well on the Forex and binary options market where both currencies are classified as the most liquid currencies along with the euro.

The GBPUSD has a wider spread than EURUSD and is perfect for those who like scalping, and those who favour automated trading for their short timeframe trades. This pair is characterized by a bigger actual range (or tunnel trading) due to frequent movement. It is one of the most traded currency pairs in the world.

As binary options traders, or future traders of this particular currency pair, there are some factors which should be considered when trading GBPUSD. Pay attention to the following:

  • The GBPUSD pair mainly moves when the European and USD sessions are taking place since the European market is the most active then, so you should pay attention to trade during these sessions and avoid Asian markets trading times;
  • Try to trade especially when Retail Sales and the GDP news in the UK are released since they stimulate the movement of the GBP even more than usual. This news put the GBPUSD pair into the spotlight and that is when you should take action;
  • Take a peek into the economic calendar and observe the dates reserved for setting the interest rates, one of the major tasks of the central banks. The Bank of England is meeting on a monthly basis, whereas the Federal Reserve in the US meets every 6 weeks. This means that you should take a look at the at least once a month. Interest rates define the course of currency movements and are an important part of the monetary policies in each country.

News to be Watched in the UK

The GBP is one of the best known and most significant currencies on a global level. Big news releases have a tremendous effect on the GBP movement in the market.

The UK might be still a member of the EU, but it never used the euro as its currency but stayed loyal to its national Pound. The central bank in charge of the British monetary policy is the Bank of England which has the task to keep inflation a slow as 2%. The Bank relies on the Monetary Policy Committee (MPC) to check on inflation and economic activity in the UK every 30 days.

The UK keeps these meetings private as opposed to the European Central Bank, with the exception when interest rate changes are announced, then, the MPC publicly announces such events.

The movement of GDP in the financial market can also be intensively felt when the UK GDP news are released, whereby the preliminary results are as important as the end results since there are no significant changes added to the final version. Retail Sales and the Purchasing Manger Index (PMI) are also the kind of news that keeps the GDP moving. The PMI carefully examines economic activity by sector, i.e. construction, manufacturing, and the service sector. As a trader, do also not miss to check on the inflation or Consumer Price Index (CPI) which contributes to the GBP volatility in the fast market. The CPI is one of the key priorities of the Bank of England and this news actually accounts for the most aggressive price movement of the GBP.

Notable Economic News in the USA

As the world’s biggest economy, the USA has a lot of important news to share every month. The USA remains unbeaten when it comes to the economic status and as such, the US economy is significant beyond US borders as well.

Important news on US economy and relevant data for trading can be gathered from the jobs data issued by the Federal Reserve and the CPI referring to the inflation rate, as well as from the Institute for Supply Management (ISM), Retail Sales, GDP, and Manufacturing and Non-Manufacturing, Durable Goods Orders release, etc.

What is In for Traders in Economic Releases?

Since job growth is really turning the market upside down, prepare for major GBPUSD price movements upon Non-Farm Payrolls news in the USA and Claimant Count release in the UK as they represent a basis for the decisions that central banks of both power countries will take into account when defining their monetary policies. PMI and ISM news can also be useful since they reveal important service sector data like contradictory or expansionary conditions, as well as the status of manufacturing and construction sectors giving traders the opportunity to make an educated guess on what decisions will be made on the subsequent bank meetings.

The Federal Reserve’s Federal Open Market Committee holds regular meetings every six weeks and every 2 nd or 3 rd meeting is open for the press, whereby the USD experiences sudden movements causing fluctuations of other USD-related currencies as well, including, of course, the GBPUSD currency pair a swell.

Trading GBP/USD

You will learn about the following concepts

  • Introduction to GBP/USD pair
  • GBP/USD or the Cable
  • Exchange rate factors
  • Examples


As we already mentioned, there are two types of currency pairs – majors and minors. There are 8 major pairs and the reason why they are called major is that they account for 85% of the daily trading volume in the Foreign Exchange Market. The situation is not that different when talking about binary options trading – traders prefer major pairs over the minor ones, because there is much more information about them and it is easier to recognize when a pair’s value will remain stable or when it will become more volatile.

How to Trade the EUR/GBP in Binary Options

Updated on: 6 January 2020

The EUR/GBP is one of the most popular currency pairs in the world. And that is for the simple fact that the UK has one of the strongest financial markets in the world in addition to the fact that the European region is one of the most significant economic regions in the world today.

However, since these currencies are both from the same region, the EUR/GBP is an interesting pair for traders. Its value represents just how many GBPs you can get for a single Euro. Ultimately, this value comes down to how the economy of the European region is changing in relation to that of the UK and vice versa.

Things to Look out for as you Trade the EUR/GBP

EUR/GBP value is mostly affected by announcements from the Bank of England (BOE) and the ECB (European Central Bank). The latter releases news regularly; a lot more often than the BOE.

In general, these bodies release information regarding presiding interest rates, and other information generally used by investors to decide whether holding a certain currency is more or less desirable.

Politics are also quite important in the price movements experienced by this pair. For instance, the deliberation by the UK to leave the EU region and be on its own during the Brexit period had quite an effect on this currency pair’s value.

Things like the economic crisis in Greek, and the subsequent reactions by the EU also caused a notable effect in the value of this currency pair.

The news reports to look out for in this case include GDP (Gross Domestic Product), CPI (Consumer Price Index), and things like interest rate changes and inflation levels.

Something You Should know about the EUR/GBP Pair

The EUR/GBP is generally known for its relative stability. Consequently, it is not very volatile. This makes it more appropriate for binary options traders for whom cautious trading is a priority.

For this same reason, this currency pair is also more appropriate for traders who prefer long-term trading as opposed to short-term trading.

The Best Time to Trade EUR/GBP

On the whole, the best time to trade the EUR/GBP pair is a product of the trading method you favor above all others. If you like to trade over the shorter time-frames such as over 5 or 10 minutes, then trading when the European session is in full gear is the way to go.

For geographical reasons, there is no clear difference between the UK session and the European session. There is just an hour separating the UK and Frankfurt, ECB’s headquarters. During these hours, you can find plenty of trading opportunities and make yourself some money.

However, if you have no problem leaving your binary options trade to sit for a day or so, it does not make much difference what time of the day it is. You can open trades when the markets are quiet because you understand that the expiry time of the contract will extend far beyond the current daily trading conditions.

In general, you should know that the EUR/GBP pair is a very liquid currency. In fact, it is one of the top ten most traded currency pairs. Therefore, it is very active throughout the trading day, and not just during the UK/European session.

What Options Work Best with EUR/GBP?

Not all options can exploit the prevailing market conditions. With the High/Low options, you have to predict the direction of the currency pair’s value. Then we have the One Touch and the No Touch options, where price direction is less relevant.

During periods of significant news releases, you can expect quite a bit of volatility in the EUR/GBP pair, and it is not always in a direction you can predict.

In such a scenario, you can use the Touch options because it will not matter what direction the currency moves as long as it deviates far enough from the current price point to surpass the set limits.

However, once all the major news have been established and the currency pair starts to follow an established direction, you can change the strategy and use a different type of option.

In particular, you can use the High/Low options because you are now in a position to tell with a better level of certainty that the currency will keep going up or down.

Finally, when the session is no longer active and the currency pair is just ranging quietly, you can try the No Touch options because you can fairly expect that the price will not encounter any interesting movements over the given period.

But again, the thing to remember is that the length of the contract you are using will dictate which strategy will work out best for you. While the EUR/GBP pair may not be the most volatile currency pair, you cannot discount the possibility of future news releases substantially influencing its trend in ways you might not predict.

One More Thing

That said, there are other things you will need to have in place as you trade the EUR/GBP. The above information is just a general guideline on what you can focus on as you devise a strategy to trade this currency pair.

At the end of the day, you will have to put some time into knowing what price prediction parameters will give you the best signals, and what options are best suited to your personality. Since the EUR/GBP is typically not too volatile, a trend indicator could help you predict this currency’s future behavior.

But at no time can you ignore the influence of various major economic events in the UK and the EU region. Even the technical price indicators for this currency will change based on the fundamentals that come with the reports released by BOE and ECB.

The use of other trading tools should only serve as a way to confirm what the fundamental factors imply about future price movements. At the very least, they should help you determine at what points to open your binary options trades and for how long they should remain open.

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