GBP/USD Currency pair

n this article we consider the peculiarities of GBP/USD currency pair. GBP/USD is an abbreviation of British pound and US dollar currency pair. The currency pair quote indicates how much money it is necessary to pay in order to buy 1 British pound.
It is very popular trading instrument in Europe and, especially, in Great Britain. It stands third on the list of the most traded currency pairs worldwide, daily trading turnover reaches 12% of the total Forex market turnover. This currency pair is really unpredictable and has strong volatility. Its fluctuations are short-term and unstable. Due to such behavior in the market it was called Cable.
Daily fluctuations of the currency pair reach 130 points on average. Low liquidity of this pair is observed only in the Asian region (average movement is about 30 points). That is why novice traders are not recommended to start with this pair.
Many traders prefer EUR/USD to the Cable. As a rule, British pound moves in the same direction as EUR/USD, but not always.
Pound-dollar movement can be absolutely different from the same euro-dollar in the period when certain “cable” news is released. For example, the British Government changes interest rate through the Central bank. Pound movements are similar to the movements of euro and Swiss franc. One should always be careful trading with pound because nobody knows what surprise it will bring this time. Pound often moves against the news; even when everything seems favorable for the currency, its rate can fall down. Many traders choose this pair for swap trading because of a substantial difference in interest rates of pound and dollar.

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The best hours to trade Forex

The highly volatile and dynamic market of currency trading is built on the price changes of currency pairs that are being traded. There can be any number of price changes oscillating from high to low and back within any given minute. The Forex market is volatile and busy due to the number of traders buying and selling currencies. Demand and supply is the same and rules regarding these apply in the same way as in any other market. An investor who wants profitable trades can start at the time the market is at its busiest. This means that the investor will be able to find either buyers or sellers for his currency trading.

One salient point about the Forex market is that you are always able to find a buyer or a seller for your currency trading needs. This is an aspect of currency trading that is a distinct advantage to traders. For one thing, you can trade at any time during the day or night as the market is open at one of the sessions around the world. This access to the market is one factor for its popularity among retail traders. Trading starts off in New Zealand and is followed closely by Australia, Asia, Middle East, Europe and finally America. Each of these market sessions has their own characteristics. Out of these sessions more than 50% of the trading is done during the European session and the American session. Therefore, a trader who wants to trade more profitably should concentrate on these two sessions.

The different sessions around the world at time overlap each other in trading hours. These overlapping time periods offer the most dynamic and profitable trades for the investor. Out of the overlapping time periods the best are when London and New York sessions overlap. This gives the investor the most dynamic and busiest time in the entire Forex market offering the best potential for profits.

As a trader or an investor in the foreign exchange market it is best to study the overlapping time periods and trade within them. A close study will reveal that the New York session overlaps the London session during 8:00 am and 12 Noon EST. Most big market moves originate during the London session and the time that overlaps the New York session.

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