What is GBP USD FX trading, and How to trade GBP USD?

What is GBP USD FX trading, and How to trade GBP USD?

GBP/USD forex trading is the way of using the ending for purchasing the previous. In simple words, you are trading USD in against GBP, more respectively, creating the value of GBP in against USD. Do you know why we do that? Well, because the rates of both currencies are often fluctuating. Your target must be traded at the best rate comparatively from the previous rate (starting rate). The method in which GBP/USD FX trading works is to grab the other side of the coin.

This may refer to that you are allowed to trade in opposition to the value of this currency pair rising and decreasing. That’s necessary because it stands to reason that you are not often rooting for the worth of GBP to rise than USD. So if you finish a “buy” order, you need its value to rise. Although, if you finish a “sell” order, the value will drop.

While you trade forex, the target is to differentiate the value of one currency from another. GBP/USD stands for the value of the GBP in connection to the USD. If we explain this in technical terms, we compare the base currency, which is GBP, with the quoted currency, USD. Investors and financial professionals have been collating the value of both currencies for centuries.

Therefore, GBP/USD is one of the most active forex pairs in the trading markets across the world. Before the arrival of the registered forex market, the GBP and USD were closely connected because of nearer economic and political ties among the U.S. and Britain. Nearly in the 1800s, the value of 1 EUR was worth roughly $5. However, the value of the U.S. increased, and its currency achieved strength. While the Bretton-Woods system attached the worth of the USD to the costs of the gold, the exchange rate was changed EUR 1/ $4.03.

In the 1970s, while the Bretton-Woods system fell, the U.S. decreased the “gold standard”, and USD embellished free-floating, similar to the GBP. As a result, the GBP/USD exchange prices are slowly changing as per the time period. From the price of the 1990s, which was 1EUR/ $ 2, it currently held around 1EUR/ $1.40 mark. Forex traders can check the live rate of GBP/USD FX pairs through the online charts, or some brokers also provide historical data of forex pairs.

History of GBP/USD Forex

We all know that GBP/ USD are connected with each other. They are compared and exchanged for centuries. You can check online the historical data of GBP/USD Fx from 2000. This is the time when it began receiving traction and enhanced as the largely traded forex pair across the world. The average trading volume was $93 billion in 2000. Now, the average trading volume of GBP/USD has increased, which is approx $330 billion. This is the main factor behind trading GBP/USD. A substantial daily volume refers to the high liquidity available in the market. The advantage of this is that orders are executed in a ratio of seconds and also should be completed on time. This does not happen with other forex currencies pairs. Some top brokers who offer forex currency pairs are ABinvesting and HFTrading.

Key Factors that Influence the GBP/USD real-time

Various factors and events have adverse effects on the GBP/USD forex trading market. Because political, social, international alignment factors of the U.S. and British affect the financial markets of both countries. For instance, any international events and incidents that take place in both countries affect the rate of their currencies. GBP forex news also has terrible effects on the rates of currency prices.

The U.S. and British also participate in unison while they participate in specific worldwide events. For instance, In the Iraq incident, both countries acted together. However, That is not an event among the two countries, and it may also affect the price rate of GBP/USD. If The U.S. and British react similarly to a political event and any other events take place across the world, that can affect the rate of GBP/USD.

When to Buy or Sell GBP/USD?

Summarising when to sell or buy GBP/US is not an easy task. You can judge what the best move is. With the help of the below points, you can try your best to identify better timing to buy and sell GBP/USD.

Must update yourself with current political events like elections, trade wars, trade deals, and social unrest.

Compare the recent price of GBP/USD vs the recent pair’s historical cost.

Must be aware of economic policies that can harm GDP, interest rates, employment, trading relations, etc.

Must do your research work such as data analysis, including price movements, technical indicators and trends, support level, and resistance points.

Conclusion:

GBP/USD is the most popular currency pair. Trading this currency pair is not an easy task. Here we discuss some factors that affect the value of the GBP/USD FX pair. Key points which help you to determine the best timing for buying and selling USD/GBP. Read the complete article carefully for collecting details about historical data of GBP/USD.