The EUR/GBP is the eighth most traded currency pair in the world. The pair represents the exchange rate between the Euro and the British Pound Sterling.
EUR/GBP Binary Options Trading
The EUR/GBP is well known for its low volatility, with its exchange rate hovering between 0.5673 and 0.9800, although this may change depending on external forces. The pair can also be quoted as GBP/EUR.
Why trade EUR/GBP
· Low volatility
The EUR/GBP is a low volatility currency pair. This means that its falling and rising trends can be quite long and may not change very frequently. This low fluctuation offers a great opportunity especially for new traders to get familiar with binary options currency trading.
Tip: The problem with currencies with high or rapid fluctuations is that a new trader may incur losses if you are unfamiliar with the currency pair.
· Easier predictions
The two currencies are closely related because the British economy and the Euro Area economy are also closely related. This means that it is easier to predict the direction of both currencies because they are affected by more or less the same factors.
· High trade volume
This currency pair is made up of the ‘major’ currencies. As such, there is a high trade volume around the EUR/GBP offering many opportunities for gain.
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Type of available binary options for EUR/GBP
- Basic Call/Put options: Predict if the exchange rate for EUR/GBP will move up or down before the expiry time.
- Touch options: Predict whether the exchange rate for EUR/GBP will touch the given strike price before the expiration time.
- In/Out: Predict whether the exchange rate for EUR/GBP will stay within a range of two strike prices.
Possible signals for EUR/GBP
· On June 30, 2015, the EUR/GBP exchange rate fell by about -0.35%, compared to its rivals. This happened following calls by Greek Prime Minister Alexis Tsipras to hold a referendum on the austerity measures creditors are proposing.
· On June 30, 2015 the GBP/EUR exchange rate fall as low as 1.4160 following fears of a Greek exist from the Euro Zone.
· On July 1, 2015 the pound fell following announcements by the Bank of England (BoE) against the risks of increasing interest rates as of yet.
· Technical analysis for July 1, 2015, showed the Euro returning to a resistance of 0.7140 and a support level of 0.7187, returning to where the currency was at the opening of the trade week.
· On June 30, 2015, the EUR/GBP fell slightly as the markets hover around a more expansive consolidation area. The currency bounced around a resistance level of 0.74 and a supportive level of 0.70.
Factors Influencing EUR/GBP Exchange Rate· Economic announcements- Central European Bank (CEB) and the Bank of England (BoE) are the most important sources of economic information in the Euro zone and in the UK respectively. Any announcements pertaining to interest rates, inflation, monetary policies, consumer index, GDP and other economic indicators will affect the EUR/GBP exchange rate.
· Political and economic trends- Political and economic trends such as the Greek crisis, elections, financial recession all have a psychological impact on investors. This affects trade volumes, and buy/sell decision. In turn, this influences the exchange rates.
· Relation to other major currencies- When the Pound or Euro is weaker than the U.S. dollar, for example, both currencies become attractive for export, therefore raising the exchange rate between the EUR/GBP.
· GDP of the Euro zone and UK
· Inflation and monetary policies in both regions