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EUR/GBP: Investing the Most Popular Cross Pair

currency binary options

When trading currency, it is important thing to remember that you should buy one that will appreciate in value against the other so you can make a profit. For you to be able to know the latest value, you should be always updated on the latest market news. Before venturing on this option, a trader must understand how it works.

Each currency can affect its underlying value and price movements relative to other currencies in this market differently. They are always trade against one another, if one of it isn’t doing well it means that the opposite is doing that much better giving headway to a profitable outcome. This is vital for international investment. It allows two countries who normally buy and sell in their own currencies, to trade with each other.


A standout among the cross pairs

Currencies are always traded in pairs. There are numerous pairs accessible for trading. Traders should focus in the most traded pairs because they are generally active most of the time. Most of these currencies that are actively traded in the market are paired with USD because it’s the most widely use monetary unit in the world. But there are monetary unit that don’t correlates with USD which are also doing good in the market.

Pairs that do not involve US dollar are known as cross currency pair. You should always keep an eye on these crosses such as EUR/JPY, EUR/AUD, CHF/GBP and EUR/GBP which is the most popular cross available in binary options. Since GBP/USD is most affected by USD movement in the market and Eurozone is the second important partner of Great Britain; taking in these significant factors, you can surely work this particular pair.


The two European currencies

EUR being the second most commonly traded unit in the market is very prevalent and adds liquidity to any pair it trades within. This is the official monetary unit of many nations in Europe and Africa which belongs to eurozone. Though UK is official member of European Union, they didn’t adopt euro as their official unit. Having their own currency, UK has the control in maintaining domestic interest rates. GBP which is also referred pound sterling acts as large reserve due to its relative value compared to other major currencies in the market.  Traders based its value on overall strength of the British economy and political stability of its government. Due to its high value relative to its peers, the pound is also an important benchmark for many nations and acts as a very liquid component in the market.

The most quiet and calm pair

The price movement will just move more than a few points in weekly intervals. This pair is overlooked most of the time by many because it isn’t the most volatile of pairs. But it is an excellent pair to trade in intraday system because of the fact that it moves slowly in the market. Traders can take time entering and exiting your trade positions, even if it is in shorter time frames for instance. If you are starting to trader in a slow-moving pace but predictable pair then this pair is the ideal for you.

But we should not forget that the price of one item is very high, so even small movements have been very significant changes in the deposit. Prediction of a given pair usually is sold at projections for depreciation with growth more likely to be unpredictable jumps.

How and when to trade this pair

A very profitable strategy in trading this pair is on Asian session on the highest or lowest price of the previous day. The Asian market is very jaded for this particular pair and it’s very rare to see a strong support or resistance broke.

A trader can easily sense that European traders are entering the market at around 6:00 GMT when volatility starts rising and volume begins picking up. It is the European market which usually makes the initial movement and gives direction to certain pairs, particularly those connected to the European region. Then EUR/GBP comes in, it is the most ideal timing to trade this pair.

Once you become more experienced you can always move on to the EUR/USD or GBP/USD pairs, for instance, which are far more volatile and have greater daily ranges. And if you are specifically a day trader you’ll want to focus on the top pairs for the region you trade in to further ensure the best trading conditions.

Now that you are aware of the advantages and benefits of EUR/GBP pair, expect that your risk is low and profit is high. You can start trading with us today!

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