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How to Trade EUR/GBP

Your capital may be at risk. This material is not investment advice.

The EUR-GBP currency pair is among the most popular in South Africa for the forex market.

The EUR-GBP is a currency pair between the Euro and the British Pound. It can easily be defined as the number of British Pounds that can purchase one Euro. As such, while trading in EUR-GBP, South African traders in binary options are advised make an effort to foretell the increase or decrease in the value of the euro when compared to the GBP.

In the event of a possible increase, the trader will purchase a CALL option.

In the event of a possible decrease, the investor places a PUT option.

The most important role in this currency pair trade is played by two banks namely;

1. The European Central Bank (ECB)
2. The Bank of England

Understanding main monetary policies in these banks are crucial in the trade of EUR-GBP currency binary options.

What Moves The EUR-GBP Currency Pair Move?

As is the case with many currency combinations, there are a number of factors that catalyse the movement of the EUR-GBP currency pair.

Economic stability is chief among these factors.

The economic crisis of 2008-2009 saw the stability of the England economy prove to be a more sustainable option as compared to that of Great Britain. This resulted in an increase in the value of the EUR-GBP.

Other factors that influence the EUR-GBP include;

  • Gross domestic product
  • Levels of investment
  • Political and economic climates

A careful analysis of these factors and a look at top 5 binary options beginner tips will help you embark on this business in South Africa.

Crucial Economic Indicators in Europe
The economic news of Eurozone can influence the EUR-GBP currency pair. However, traders should not be too shaken up by negative economic releases from Europe, the market appears to have factored ahead quite a lot of the news releases.

The consumer price index and European Central Bank are very hawkish when it comes to inflation and monetary policies.

Important Economic Indicators in the UK
The pound is hardly influenced by economic changes in Eurozone. As much as the UK is a member of the European Union, it does not use the euro as its currency. Therefore, the Bank of England is not as inflation-phobic as the ECB and this dovishness has been noted to cause a huge influence on the financial markets.

Outcomes of Economic Releases
binary options traders can expect sharp movements when it comes to the EUR-GBP pair. These trends can bring about a lot of volatility. For South African traders who are engaging in the EUR-GBP pair, this represents a lot of opportunities to make a sizeable profit.

It is important to study the market trends before investing in the EUR-GBP pair. This binary options trade also calls for readiness to act at any time for South African traders and all binary options traders around the world.

Author info:
Author: Kungawo
Kungawo is from: South Africa, Cape Town
Please be advised that certain products and/or multiplier levels may not be available for traders from EEA countries due to legal restrictions