By Taylor Wilman
One of the oldest currency pairs in the foreign exchange market is the GBP/USD (or the Great Britain Pound and the United States Dollar) pair. Since each of the currency in the lineup is considered as a major currency, it is also quite popular to novice currency traders. For a trader who’s interested in capitalizing with tools that he can easily keep tabs on, the pair is a good option.
More about the GBP/USD Pair
The GBP/USD pair is often referred to as “The Cable”; the nickname is based on the first-ever transatlantic communication cable that went across the Atlantic floor to establish a connection between Great Britain and the United States. Since it’s a famous currency pair, different kinds of investors, including novice currency traders, are confident in selecting the currencies as their tools.
Since the GBP/USD pair involves the massive economies of the UK and US, many forex traders are confident with the selected currencies as their medium; according to them, regardless of any possible outcome, the pair is not difficult to monitor. If they want to get the lowdown on each of the currencies, as well as all the latest updates about the pair, getting the necessary information can be almost effortless; there are heaps of available reports in financial forums and different communities online.
Short & Long Sides
The short side of the GBP/USD pair is known to grant profitable opportunities for forex traders. Especially if they would trade on the last days of the week, as well as gauge reports about the recent market performance, a huge win is possible. Although, with a short setup, it is important to note that always placing stop orders, even if the stakes are low and affordable, is a must.
On the other hand, the long side of the GBP/USD pair is attractive to traders; it can, however, be a notch attractive if support levels are set high. Since a currency’s support and resistance levels are usually relative, it’s a good idea to establish higher points that can remain effective for a period. Granted that the movement of the particular currency pair is observed regularly, together with the strategic placement of stop orders, incoming profit can be anticipated.
The Pair’s Status in Global Economies
The exchange rates of the GBP/USD pair were reported to have dropped on week 1 of October 2015; it goes to show that supply and demand in other countries, instead of supply and demand in the UK and US only, has a strong hold on the particular currency pair. Due to the concerns that revolve around complications with the monetary policy, as well as a slow progress in Asian communities, a significant impact in global markets was highlighted. Alongside, this implies a reflection of the economic conditions of both the UK and US.