GBPUSD pair profile, characteristics and influencing factors

According to data from IG Group (2016), the GBPUSD currency pair is the third most traded forex pair in the world. 9.3% of all transactions on the international forex market are buy/sell GBPUSD, its popularity is just a few inches behind EURUSD and USDJPY.

The couple’s popularity is also confirmed by numerous nicknames. From the simple abbreviation GU, pound-dollar. However, do you know why traders love the GBPUSD pair? Check out our review of the characteristics and factors affecting the GBPUSD pair below for more information.

GBPUSD often breakout and profits on different time frames.

People say they don’t know and don’t love it. Therefore, before trading GBPUSD will help us understand its characteristics. Of this best-selling pair:

1. GBPUSD very high daily volatility: The daily movement range of the GBPUSD pair is between 100-200 pips after the Brexit referendum in 2016. Volatility can sometimes reach 300 pips in a day. This makes the GBPUSD pair a favorite of technical scalpers and users. Day-Trader who wants to profit from short-term transactions.
2. GBPUSD often encounters major breakouts and reversals.: GBPUSD chart movement does not go up or down. But there is a lot of crookedness. when the reversal The reversal will last for several days until it breaks the key support and resistance limit. The unique nature of GBPUSD makes it a favorite with swing traders and other long-term traders.
3. GBPUSD is suitable for trading on any timeframe.: Some Forex currency pairs cannot be traded on all time frames. As volatility is generally lower on the low timeframes (below H1), however, GBPUSD tends to be volatile on both the high and low time frames.
4. GBPUSD sensitive to high impact news: GBPUSD is a currency pair affected by interest rate announcements. Retail Disclosure inflation data Or the same high impact economic news set out in the forex calendar, it’s not just the British news that GBPUSD has reached its extreme. but also from the United States. Therefore, news traders are very fond of this pair.
5. GBPUSD trades with high liquidity conditions.: Did you know that London, England and New York, USA are the two largest financial market centers in the world? Therefore, transactions between GBP and USD are crowded every day. GBPUSD is especially profitable for trading the European session to overlap with the American session (14:00-22:00). WIB)

In short, the GBPUSD pair is trading well in forex marketAs his character meets the needs of different types of traders, from scalpers, day-traders, swing-traders to news-traders, time frames can also be easily adjusted. Traders can benefit from GBPUSD on the M5 to M30 time frame, day traders and news traders can take advantage of GBPUSD on the H1 to D1 time frame, while swing traders can use it on the D1 to monthly.

Economic data releases affecting GBPUSD

As stated earlier, the GBPUSD currency pair is easily influenced by major economic announcements and data from the UK and US. After the publication of announcements and information, GBPUSD can sometimes change up to more than 100 pips in just a few minutes. What announcements and information affect GBPUSD? Here is the list:

1. US Federal Reserve Interest Rate Announcement: Every year, the Federal Reserve holds 8 Monetary Policy Committee meetings. The schedule can be found on the FOMC website for each meeting. A committee called the FOMC (Federal Open Market Committee) determines the current performance assessment of the US economy. as well as what type of monetary policy is appropriate for the current economic situation. If the Fed decides to ease its policy by cutting interest rates, GBPUSD has a chance of rising. meanwhile If the Fed decides to tighten policy by raising interest rates, GBPUSD has a chance of falling.
2. The FOMC (Federal Open Market Committee) publishes the minutes of the meeting.: Minutes of the FOMC meeting are usually released two weeks after the meeting ends. in this press release Traders will follow in detail on why the Fed changes or does not change interest rates at the meeting. They may also be looking for clues as to whether the Fed will raise or lower interest rates at its next meeting. Or maybe less to change interest rates at all.
3. US Employment Disclosure: US employment data It will be published on the first Friday of each month. Content includes unemployment rate labor force participation rate average hourly salary growth; and NFP (Non-farm Payroll) information. Of all the data, NFP tends to be the most influential. It shows the number of new non-farm and civil jobs. If the NFP number exceeds expectations, the GBPUSD tends to weaken. If the NFP number falls below the forecast, the GBPUSD has the potential to strengthen.
4. Disclosure of PMI (Purchasing Managers’ Index) survey by ISM Research Institute: There are two PMI reports published by ISM for the United States: Manufacturing PMI and Non-manufacturing (services) PMI. A PMI below a threshold of 50 indicates a recession (shrinkage), while a reading above a threshold of 50 indicates a recession (shrinkage). 50 indicates that the economy is growing (expansion), an increase in the US PMI has the potential to weaken the GBPUSD, while a decline can actually increase the GBPUSD.
5. US Consumer Price Index (CPI) Disclosure: CPI is one of the main considerations for central banks to raise or lower interest rates. If the US CPI is in line with the Fed’s target (about 2 percent), interest rates will remain unchanged. Therefore, a higher US CPI increase may Causing GBPUSD to weaken while decline strengthens GBPUSD
6. Super Thursday BoE: Since a few years the Bank of England (BoE) has gathered the moment of interest rate announcements. Disclosure of the Minutes of the Policy Meeting and the UK inflation report. The selected time slot always falls on a Thursday. hence the nickname “Super Thursday”. During the series of announcements, GBPUSD can move very erratically. As the bias of each model may differ, it can generally be estimated that if inflation and BoE interest rates rise, GBPUSD has the potential to strengthen. meanwhile If BoE inflation and interest rates drop, GBPUSD tends to weaken. However, market responses may differ. It depends on the content of the minutes of the upcoming policy meeting.
7. UK Employment Disclosure: There is no exact schedule for this release. which clear information is published once a month The report contains the unemployment rate. average salary growth and change in the number of claimants The change in the number of claimants is a change in the number of unemployment benefit claims filed by citizens with the British government. If the unemployment rate and the number of claimants increase It can be negative for GBPUSD. On the other hand, GBPUSD can strengthen if the unemployment rate and the number of claimants decrease.
8. Disclosure of the PMI (Purchasing Managers’ Index) survey by IHS Markit Research Institute.: IHS Markit published three PMI results for the UK: Construction PMI, Manufacturing PMI and Services PMI. A PMI below the threshold of 50 indicates a recession (shrinkage), while a higher reading indicates a recession. 50 indicates that the economy is growing (expansion). A rise in the UK PMI could increase the GBPUSD while a decrease would weaken the GBPUSD.

Here are some announcements and economic information that you need to pay attention to when trading GBPUSD. forex calendar Every week to check if there is a schedule to release information or not. Because the price movement during the release will definitely skyrocket.