As we dive into the world of trading, it’s important to keep an eye on different currencies and their fluctuating values. Today, we’ll be focusing on the British pound, which has been making headlines lately due to its uncertain future. Let’s take a closer look at what’s been happening, how to effectively trade GBP/USD, and some predictions for the future.
The Current State of GBP/USD
The British pound has been on a rollercoaster ride recently, with bearish bets pushing it to its lowest point in over two years. This has caused some concern among traders, as the uncertainty surrounding Brexit negotiations continues to affect the market. In fact, the value of the pound has dropped nearly 6% since May.
Note: This graph is for illustration purposes only and does not reflect real-time data.
Tips for Trading GBP/USD
Despite the uncertainty of the market, there are still ways to effectively trade GBP/USD. Here are a few tips to help guide you:
- Keep an eye on Brexit developments: Any progress or setbacks in Brexit negotiations could have a major impact on the value of the pound.
- Use technical analysis: Pay attention to trends and technical indicators, such as moving averages and support/resistance levels, to help identify potential entry and exit points.
- Stay informed: Follow news and events that could impact the market, such as economic data releases or political developments.
- Manage risk: Use stop-loss orders to limit potential losses and consider diversifying your portfolio to spread risk.
How to Effectively Trade GBP/USD
Now that we have some tips to consider, let’s look at how to actually trade GBP/USD. Here’s a step-by-step guide:
- Open a trading account with a reputable broker.
- Select GBP/USD as the currency pair you wish to trade.
- Decide on your trading strategy and develop a plan, including entry and exit points and risk management strategies.
- Use technical analysis to identify potential entry and exit points, and consider using indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).
- Monitor market news and events that could impact GBP/USD, such as economic data releases, political developments, or Brexit negotiations.
- Execute your trades according to your plan and always use risk management strategies to protect your capital.
- Monitor your trades and adjust your plan as necessary.
What the Future Holds: Predictions for GBP/USD Exchange Rate
While no one can predict the future with certainty, there are some predictions and forecasts for GBP/USD exchange rate that we can look to:
In an article by NuWireInvestor, it is suggested that traders wait for GBP/USD to break and maintain resistance levels before taking long positions. They predict the pair to make a recovery in 2020 and reach levels around 1.40-1.45.
Investopedia predicts the pound to continue its downward slide against the U.S. dollar, citing the ongoing Brexit negotiations and weak global economic conditions. They suggest traders keep an eye out for any developments in the negotiations and be prepared to adjust their strategies accordingly.
ExchangeRates.org.uk predicts the GBP/USD exchange rate to remain volatile in the short term, but ultimately make a modest recovery as Brexit concerns ease. They predict the pair to see levels around 1.30-1.40 by the end of the year.
As always, it’s important to do your own research and make informed decisions when trading GBP/USD. By following the tips outlined above and keeping an eye on market developments and predictions, traders can navigate the uncertainty of the market and hopefully come out on top.
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