Trading GBP/USD

The GBP/USD is among the most widely traded currency pairs in the world. Its popularity is partly due to market volatility and online accessibility, along with tight spreads. With trading volumes forecast to rise, find out how to start investing in the GBP/USD. We also run through forex trading tips, price breakdowns and explain how to leverage the pair’s exchange rate history to trade today.

GBP/USD Trading Brokers

  1. XTB

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    Trade 48 currency pairs with low spreads from 0.1 pips and leverage up to 1:30 (EU) and 1:500 (Global). Micro lot trading is also available and new currency traders can make near-instant deposits with no fees.

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    FXCC offers leading fees compared to alternatives with spreads as low as 0.0 pips and $0 commission. Over 70 currency pairs are also available, providing more opportunities than most competitors.

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    Pepperstone offers ultra-low spreads from 0.0 pips on the Razor account and has an excellent selection of 60+ pairs. You can also trade currency indices, which aren't available at many alternatives. Forex lots start at 0.01.

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    Trade 85 major, minor and exotic forex pairs via CFDs on IB's FXTrader platform with tight spreads and low commissions, or trade forex on the spot market. They offer more FX assets than almost any competitor.

  5. XM

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    XM offers ultra low spreads across a wide range of forex assets with no re-quotes or hidden charges. Forex can be traded 24/5 on desktop, web and mobile. Over 50 currency pairs are available including all majors.

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    Trade 50+ major, minor and exotic pairs with an award winning platform. Users get institutional-level prices with spreads from 0.0 pips and low commissions. The VPS will also serve high-volume, active day traders.

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    OANDA offers 68 currency pairs, which is above the industry average. You can speculate on majors, minors and exotics, with spreads from 0.8 pips on popular pairs. There are no commissions and leverage is available up to 1:200. Average execution speeds are fast based on tests, at 12 milliseconds.

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    IG offers currency trading on its award-winning web platform and mobile app. Comprehensive charts and forex analysis tools are also available through ProRealTime.

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    Trade 70+ currency pairs with ultra-fast execution speeds and tight spreads from 0.46 pips on EUR/USD. The range of forex assets outranks many rivals.

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    Plus500 offers forex trading via CFDs with tight, floating spreads and an excellent suite of 60+ currency pairs. We got spreads of 0.6 pips on the EUR/USD during testing - lower than many alternatives.

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    Markets.com offers major, minor and exotic currency pairs available to trade as contracts for difference (CFDs) or spread betting (UK customers only). Spreads are competitive starting from 0.6 pips on the EUR/USD.

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    NinjaTrader supports the trading of popular currencies including the EUR/USD. The trading software also offers unique features tailored to forex trading, including specific order and market windows.

  13. Axi

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    Axi offers a great selection of 70+ major, minor and exotic currency pairs. There are no restrictions on trading strategies and the broker boasts impressive spreads by connecting to 20 liquidity sources.

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    Trade 170+ major, minor and exotic forex pairs with floating spreads and leverage up to 1:30. Forex futures are also available on some currency pairs. However the forex broker has a track record of amending margin requirements without appropriate notice.

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    Trade 35 major, minor and exotic forex pairs through CFDs with floating spreads from 0.1 pips. Alternatively, binary options allow you to speculate on rising and falling prices with a fixed stake and payout.

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    Focus Option offers 22 forex pairs tradeable via binary options, including a selection of majors and minors. FX pairs are also available to trade with margin on Focus Option's mobile app, which offers high leverage up to 1:50 and spreads from 1 pip.

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    Global Prime traders can access 48 forex pairs including majors, minors and exotics with tight spreads from 0.9 with no commission or from 0 with a $7 round turn. Forex is traded via the leading MT4 platform, micro lots are available and latency is low via a New York-based server.

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    Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.

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    Trade currencies with 0.0 pip spreads at one of the world's leading forex brokers. IC Markets is a great choice for serious traders with superior execution and low fees.

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    AvaTrade offers 50+ currency pairs with competitive spreads from 0.9 pips and zero commissions. You can trade majors, minors and exotics around the clock on industry-leading platforms, including MT4 and MT5. Traders can also access beginner-friendly trading tools and comprehensive forex education.

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    Forex.com is a leading FX broker. The brand offers a wide range of currency pairs and some of the lowest fees in the industry. Spreads on the EUR/USD come in as low as 0.0 with a $7 commission per $100k.

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    Go long or short on 50 forex pairs including the EUR/USD and GBP/USD with zero commissions. There are plenty of opportunities to buy and sell currencies via margin or copy trading.

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    An impressive selection of 52 currencies are tradeable on eToro's proprietary platform and app. Traders can also continuously hone their forex strategies by switching between demo mode and their live account any time.

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    OspreyFX offers more than 50 major, minor and exotic currency pairs. Spreads start from just 0.1 pips on the EUR/USD and the broker provides a suite of forex trading education for beginners, including partnering with Forex Squad.

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    CloseOption offers binaries on 25+ forex pairs, including majors like EUR/USD and a few minors like AUD/JPY. Payouts vary by currency, with decent typical payouts of 75% for GBP/USD.

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    Trade 70+ major, minor and exotic forex pair CFDs with up to 1:1000 leverage, no commission fees and competitive spreads from 0.8 pips. FX trades can also be executed via the reliable and fast MetaTrader 5 software.

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    Errante traders can access 50+ forex pairs with leverage up to 1:500 (location dependant). The broker offers fast execution and tight spreads, especially to clients with VIP and Tailor-Made accounts.

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    Kwakol Markets offers a wider range of forex pairs than most competitors, with 90+ assets available. Users get fast execution speeds through the ECN model and competitive spreads. On the negative side, not all currency pairs are available on MT4.

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    Trade 70 major, minor and exotic forex pairs with ultra-low ECN spreads and fast execution via the MT4 or MT5 platforms. There are also zero SL/TP limits and automated forex trading is well catered for.

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    Ingot Brokers offers forex trading on a modest suite of 30+ currency pairs with spreads starting from zero on raw spread account types. Currencies can be traded 24/5 though exotics are only available on MT5.

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    Trade a small selection of 25 major and minor pairs. Spreads from zero on the pro account, micro-lot trading, and very high leverage make up for the limited range of currencies. The MetaTrader software is also a well-regarded platform for forex trading.

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    Axofa offers 50+ forex pairs with raw spreads and low commissions. On the downside, the broker is not particularly transparent when it comes to their account conditions and fees.

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    Go long or short on over 50 currency pairs with spreads from 0.6 pips on EUR/USD. Traders can access market-leading forex tools in the MT4 platform, including customisable forex charts and algorithmic trading.

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    Trade binary options on 25+ forex pairs including a range of majors and minors, as well as precious metals paired with USD. Payouts top 80% and users can analyze market movements on the hugely popular MT4 platform and app.

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    World Forex offers CFD and digital contract trading on 53 forex pairs, including EUR/USD and GBP/EUR. High leverage is available for CFDs, which can be accessed with competitive spreads on certain account types.

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    FinPros offers 80+ forex pairs, which is one of the more diverse offerings available. Traders benefit from ultra-low latency, MT5 support and very tight spreads and low commissions on the RAW+ account.

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    Trade 45+ major, minor and exotic pairs with deep liquidity and low latency. The ultra-tight spreads from 0.01 pips on raw accounts, competitive $7 or lower round-turn commissions and high leverage up to 1:500 will suit scalpers, who can trade without limits.

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    IQCent traders can access CFDs or binary options on 40+ forex pairs, including majors, minors and exotics. CFD spreads start from 0.7 pips and binary options payouts are decent up to 95%. Trading takes place through the broker's proprietary platform with advanced analysis tools.

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    Trade 50+ forex pairs including popular majors and minors with very high leverage available up to 1:1000. Gold, silver, palladium and platinum pairs with USD are also available.

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    Trade 25+ major and minor currency pairs with access to over 30 technical indicators in the broker's proprietary terminal. You can also follow and replicate other forex trades using the integrated copy trader.

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    Scope Markets offers MT5 trading for a range of major, minor and exotic currency pairs with high leverage and a low starting deposit. Multilingual 24/5 support is also available to support forex traders.

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    Trade 50+ forex pairs, including popular major, minor and exotic pairs. This is a decent selection, but traders will have a choice between the attractive MT4, MT5 or IRESS platforms and regulatory cover from ASIC. The VPS will also suit automated forex trading strategis.

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    Trade 49 major, minor and exotic currency pairs with fixed spreads or ECN pricing with no dealing desk intervention and a low starting deposit. You can analyze the currency markets using the broker's in-house trading platform.

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    Anzo Capital offers 45+ forex pairs including majors, minors and exotics with fast execution and spreads starting from zero. High leverage up to 1:1000 is available with a margin call at 80% and a stop out level at 50%.

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    Rock Global clients can access 50+ currency pairs via CFDs with leverage up to 1:500, world class liquidity and fast execution on the MT4 or TWS platforms. The tight spreads from 0.9 with no commission are a particularly attractive feature.

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    VT Markets offers 40+ forex pairs including majors, minors and exotics with lightning-fast execution, up to 1:500 leverage and spreads starting from 0 available to ECN account holders.

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    Binary and OTC options can be purchased on over 40 foreign exchange pairs. Typical payouts are also decent at 81% and users can trade forex binary options in just a couple of clicks.

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    Exinity offers 150+ forex pairs to trade on a very competitive ECN pricing model, with spreads from zero and low commissions of $4 per round turn. Traders can access the powerful MT4 and MT5 platforms and trade with no restrictions on popular day trading strategies.

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    ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs on the leading MT4 and MT5 platforms. Spreads are tight starting from zero and there are no dealers or requotes.

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    PU Prime clients can trade 40+ forex pairs via the MT4 and MT5 platforms with dynamic leverage up to 1:500. Spreads start from near zero on Prime accounts, which also charge a $7 commission per lot, and a zero-commission Standard account with wider spreads is also available.

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    With 100+ currency pairs including all majors plus many minors and exotics tradeable on the MT4 platform with 1:2000 leverage, SuperForex lives up to its name as a great choice for forex traders. The ForexCopy system is also useful for newer traders.

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    AdroFX has a good forex offering of more than 60 pairs, which can be traded with up to 1:500 leverage via the MT4 platform or copy-traded with Allpips. The broker also offers very tight spreads starting from 0.4 pips and charges no commission.

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    Start trading on dozens of currencies at RoboMarkets with powerful analysis tools and pattern recognition technology. 35+ currency pairs are available with tight spreads from 0 pips and rapid market execution. You can also utilise the broker's forex news alerts and economic calendar.

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    Trade 7 major, 21 minor and 29 exotic forex pairs with high leverage and a choice between STP or ECN accounts. Support is available around the clock and the TradeLocker forex software is provided.

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    Core Spreads offers trading on 34 forex pairs through spread betting and 40 currencies through CFDs, with both vehicles covering major and minor pairs. Spread betting spreads start from 0.6 for EUR/GBP; CFD spreads are variable and start from 1.2 pips on EUR/GBP.

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    Buy and sell over 50 currencies with zero pip spreads available via deep liquidity pools. M4Markets offers very low latency with execution speeds averaging 30ms. There are no restrictions on forex trading strategies.

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    MultiBank FX offers trading on 50+ major, minor and exotic currency pairs. Spreads are tighter than many competitors and the broker offers higher leverage than most alternatives. Automated trading strategies are also permitted.

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    Trade Nation offers over 30 of the most popular forex pairs with variable spreads. Traders can access a slick proprietary platform or MetaTrader 4, with real-time forex market updates and insights via 'Smart News'.

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    As well as a competitive selection of 55+ forex pairs, traders can access high leverage up to 1:300. You can also enjoy advanced analysis from Trading Central with easy integration into MetaTrader 4.

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    Traders can access a decent range of 60+ major, minor and exotic forex pairs through standard and ECN accounts with tight spreads from 0.5 and 0.0, respectively. Execution speeds are also faster than most competitors at 50ms, which will appeal to active forex day traders.

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    4xCube offers 60+ currency pairs with competitive trading conditions. We like that all trading strategies are permitted including scalping and hedging.

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    ActivTrades is a great broker for active forex traders with industry-low spreads from 0.5 pips and zero commissions. The forex broker also offers impressive execution quality and speeds, alongside award-winning customer service.

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    BlackBull offers 64 forex pairs with very competitive pricing through its ECN accounts, with the standard commission-free spread starting from 0.8 and spreads with commission starting from zero. The broker supports diverse trading platforms including MT4 and MT5, and provides leverage up to 1:500.

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    LQDFX offers an extensive list of 70+ currency pairs, more than most alternatives. Spreads are ultra-low and high leverage is available on the market-leading MT4 platform.

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    Trade over 30 currency pairs with tight spreads from 0 pips. Forex traders have a choice of leading platforms including MT4, MT5 and an in-house web trader. The CopyFX system also lets you mirror experienced currency traders with a $100 minimum investment.

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    Swissquote offers trading on a huge range of forex assets, covering 80+ currency pairs. Spreads start from 1.3 pips with the Premium account and there are zero commissions. Micro, mini and standard lot sizes are available plus options contracts on major currencies.

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    SimpleFX offers a competitive suite of 60 forex pairs with average spreads of 0.9 pips. The charting features are extensive, with convenient mobile and desktop access for all experience levels.

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    Go long or short on over 50 forex pairs from majors to exotics, with spreads as low as 0.1 pips. Traders can analyze the currency markets with market-leading trading software and charts from MetaTrader 4.

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    During my tests, I was able to access a very competitive range of 90+ forex pairs with ECN spreads from 0.0 pips and leverage up to 1:500. FX traders can also make use of the Trading Central signals or the broker's daily forex analysis.

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    Trade on 45+ majors, minors, crosses and exotics, with competitive pricing, ultra-fast execution and no requotes. Newer traders can access zero-commission trading. Experienced forex traders can operate with no trading restrictions and benefit from an ECN account and a VPS service.

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    FXTrading clients can access 70+ forex pairs with high leverage up to 1:500, fast execution averaging 80ms, excellent liquidity and spreads from zero. A good selection of minors and exotics are available as well as all the majors. New users can start trading forex in 4 easy steps.

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    Trade 36 forex pairs, including the EUR/USD with spreads from zero pips. FXChoice offers higher leverage on forex than most competitors, alongside 24/5 support and an accessible $10 starting deposit.

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    With over 190 forex spot pairs, EZ Invest outperforms many rivals in terms of access to the currency markets. Users can also choose between desktop software, a webtrader plus a solid mobile app. On the negative side, spreads aren't the tightest on entry accounts.

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    Fortrade offers 60+ currency pairs including a good selection of majors, minors and exotics. Trading takes place via MT4 or Fortrade's proprietary, low-latency terminal, and spreads on the USD/GBP pair average a reasonable 2 pips.

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    FP Markets is a good option for forex traders, with 70+ pairs covering an excellent range of currencies. Spreads are already tight on standard accounts and start from zero on raw spread accounts, and the broker offers high leverage up to 1:500 and top-tier liquidity.

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    IronFX offers 80 currency pairs with an excellent selection of minors and exotics as well as majors. Trading takes place on the MT4 or a proprietary platform with spreads from zero available to ECN accounts. IronFX offers more currency assets than virtually all competitors.

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    Trade 80+ major, minor and exotic forex pairs. This is a very competitive range of currency pairs with 50+ exotics to choose from, and traders will benefit from fast execution and support from extra features including a pip calculator. The MetaTrader 4 software was also designed for online forex trading.

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    Libertex offers CFD trading on 50+ forex pairs, offering long and short opportunities. Its strength comes in its tight spreads – we were offered 0.2 pips for EUR/USD.

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    Trade up to 33 major and minor forex pairs. This is a small range of currency pairs compared to competitors, with no exotics, but traders do benefit from tight spreads, low or no commissions and low latency.

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    HYCM offers 40+ forex pairs, with most available to trade on either the MT4 or MT5 platform. The maximum leverage on offer is 1:30 in accordance with regulations, and tight spreads start from 0.2 on the Raw account and from 1.2 on the commission-free Classic account.

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    FXOpen clients can trade 50+ forex pairs (28 on micro accounts) with leverage up to 1:30. Fees are competitive with spreads starting from zero with a small commission on ECN accounts, and slightly wider spreads and no commission on STP accounts.

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    Trade 45 major, minor and exotic forex pairs. This is an average range, but the broker offers attractive and very competitive tight floating spreads from 0.3. Useful features including a news feed set the broker apart from many rivals and can help plan forex strategies.

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    With 300+ forex pairs, Hantec Markets has one of the widest selections on the market. Floating spreads start from 0.2 pips with ultra-fast market execution and access to the leading MT4 platform.

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    With 60+ currency pairs available, Dukascopy offers enough majors, minors and exotics to keep most forex traders happy. The broker also offers high leverage up to 1:100 – a good amount to see from a reputable and regulated broker. Currency traders have access to excellent software, including MT4 and JForex.

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    Speculate on popular currency pairs with flexible leverage up to 1:500 and zero-pip spreads in the GO Plus account. Commission-free trading is available with micro, mini and standard forex contract sizes.

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    With around 190 forex pairs and spot metals, 140 forwards, top-tier liquidity, fast execution and spreads from near zero, Saxo Bank offers exceptional flexibility and value to forex traders. Advanced charting from TradingView is another plus for active forex traders.

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    Trade on 60+ forex pairs with no commission and competitively tight spreads from 0.6 on major pairs such as EUR/USD. This is a good selection of forex pairs and excellent pricing for commission-free trading, well below the industry average.

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    Trade a wide selection of 80+ currency pairs with spreads from 0.5 pips and industry-favorite platforms. City Index has 40+ years experience in forex trading with liquidity from tier-one banks.

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    ThinkMarkets offers 46 forex pairs, including a decent variety of minors and exotics as well the majors. Forex traders also benefit from very tight spreads starting from 0.0 pips for the EUR/USD in the Zero account.

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    CMC Markets offers a superb list of 330+ forex pairs with tight spreads and ultra-fast executions. The selection of currencies is significantly wider than rivals.

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    FXTM offers 60+ forex pairs plus 6 indices which track a basket of popular currencies. The brand's ECN accounts offers impressive spreads from 0 with low commissions from $0.40 to $2 per lot and commission-free spreads start from 1.5 pips.

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    Trade FX pairs with tight spreads & leverage.

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    Trade 60+ forex pairs including majors, minors and a selection of exotics and crosspairs with fixed spreads from 1.8 pips or variable spreads from 0.8. FX traders also get advanced trading software in MetaTrader.

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    Trade over 90 pairs and keep costs to a minimum, with tight spreads and industry-leading commissions. Currencies can be traded 24/5 with no dealing desk intervention.

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    Trade 24 forex pairs via binary options. Such a small range of currency pairs is not that unusual among binary options brokers, and BinaryCent's high payouts up to 95% compensate for the lack of range.

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    Access over 40 currency pairs with no commissions and low spreads from 0.78 pips for EUR/USD. Forex can also be traded 24/5 on a choice of reliable platforms.

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    Go long or short on a range of major and minor currency pairs with tight spreads. Powerful trading software is available with a choice of instant and pending orders.

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    Trade 200 CFD forex pairs with DMA pricing and tight spreads, ultra low latency and high leverage up to 1:1000. The range of forex pairs available and pricing model are among the most attractive in the African market.

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    Capital.com offer a long list of forex CFD pairs for trading. All have competitive spreads. The firm also ensures negative balance protection

The GBP/USD Explained

The GBP/USD is the oldest established currency pair. It is often referred to as ‘The Cable’ after the transatlantic cable laid beneath the Atlantic, which transmitted prices across the ocean floor.

Established trade existed between the UK and US for many years but it was not until the 1970s that the GPB/USD that we know today, came to fruition. The shift was marked by the adoption of floating exchange rates and the departure of tying the value of currencies to gold.

Throughout its history, there have been many events that have had an impact on the pair’s exchange rate. An understanding of which, will help you predict the effect of future events on the value of the GBPUSD. The 1980s, for example, saw a tumultuous period triggered by the end of miner strikes in the UK and the uncovering of a hole in the ozone.

Before that, the period following the outbreak of the Second World War was the most decisive in the pair’s history. It was decided that to ease Britain’s borrowing costs, the sterling would be fixed to the dollar at $4.03.

Influences On The GBP/USD

Several macroeconomic factors influence the GBP/USD exchange rate:

  • Economic growth – Arguably the best variable to measure the strength of an economy. When the UK economy looks to be strengthening, the sterling will typically rise against the dollar. The reverse is also true, a weakened UK economy will see the sterling fall vs the dollar. Investment, low unemployment and favourable interest rates can all fuel economic growth.
  • Labour market conditions – The strength of a labour market is a good indication of the strength of an economy. Low unemployment and benefits rates are a good sign of a prosperous economy that lends itself to investment. GBP/USD tends to rise when the UK unemployment rate is lower than that of the US.
  • Political events and stability – Major political elections like Brexit can cause movement in GBP/USD graphs. Brexit has certainly made its mark on the pair’s exchange rate history but for today’s investors, it may not be all bad news. At the very least, trends offer opportunities to generate trading profits. Generally speaking, however, political turmoil is unattractive to foreign investors. Decreased foreign investment leads to a depreciation in the value of domestic currency.
  • Balance of payments – If a country is in deficit it means that it’s spending more than it’s earning, often borrowing from other countries. The increased demand for foreign currency lowers the country’s exchange rate. When the UK increases borrowing, the dollar rises against the GBP.
  • Inflation & interest rate differentials – Changing interest rates impact inflation and currency value. Higher interest rates attract foreign capital and domestic currency appreciates. However, inflation rates impact appreciation. Low inflation correlates with a rise in value.
  • Speculation  Market sentiment can have a big impact on the GBP/USD exchange rate. If the value of a currency is expected to rise, investors demand more of that currency to make a profit. Increased demand typically results in a spike in the value of the currency.
  • Currency correlations – Given that currencies are traded in pairs, no single forex pair operates independently of others. Fluctuations in one currency will have repercussions for another, even if they aren’t in the same pair. Take the GBP/EUR, which is a derivative of the GBP/USD. Movements in the dollar will have a knock-on effect on the Euro because both are linked by the GBP.

Some forex pairs will trend in line with one another, others will diversify. Understanding the relationship between today’s currency pairs can be used to your advantage.

Calculating Correlation

Correlation is a measure of the relationship between pairings. Assessments use historical data to predict impacts on real-time GBP/USD charts. The correlation range extends between -1 and +1. The closer you move to +1 the more aligned the movements between the currencies are, conversely, the further away you move from +1, the difference increases. A correlation of 0 means that the relationship is arbitrary.

Calculating the correlation between pairings is relatively simple. Open an Excel and use the function (=CORREL). Then follow these simple steps to set up the calculator:

  1. Enter pricing data for the two currency pairs in separate columns
  2. Fill the columns with the daily closing prices over a set period
  3. At the bottom, in an empty cell, enter =CORREL
  4. Highlight the data in the column
  5. Insert a comma
  6. Repeat steps 4 & 5 for the second currency
  7. Close the formula

The final figure is the correlation between the two currencies.

Note, forex correlations are not fixed, meaning they may fluctuate in response to external factors.

Pros Of Trading GBP/USD

There are several reasons why investing in the GBP/USD currency pair is popular:

  • Liquidity – The GBP/USD pair accounts for approximately 14% of the daily forex trading volume. High liquidity means that large sums of money can be moved in and out of currencies, often with narrow spreads. It also means there’s a range of investment vehicles available to UK investors and day traders.
  • Volatility – GBP/USD typically boasts a wide price range compared to other major forex pairs. This is primarily due to market volatility. Significant volumes paired with high volatility can lead to large profits.
  • Resources – There is a great deal of information about trading economics available online, including GBP vs USD historical data, live rates, plus weekly and long-term technical forecasts. As a result, conducting technical analysis has never been easier. Traders today can utilise a multitude of tools from market signals and community forums to real-time charts and graphs.
  • Costs – With spot forex trading, the cost of trades are often incorporated into the spread. This is unlike other products and markets where additional commissions can eat into profits.

Cons Of Trading GBP/USD

There are also downsides to investing in GBP/USD:

  • Volatility – While volatility can bring large profits, when the GBP USD pair breaks, serious spikes can lead to substantial downside. To curtail losses, investors should employ disciplined risk management strategies.
  • Ambiguity – Rapid movement between the pair can often produce false signals. As a result, inexperienced traders may fall prey to misleading information.
  • Influence – The Cable is greatly influenced by UK forex and economic news, particularly when there are discrepancies between monetary policy and exchange rate expectations.
  • Competition – Today’s markets are increasingly dominated by advanced trading algorithms. Even with competitive 1 month and 1 year forward rates and excellent market signals, traders often need more than weekly pivots, 10-year or 50-year charts to turn a profit.
  • Overexposure – Some currencies move in the same direction, such as the GBP/USD and EUR/USD. Given their positive correlation, investing in both can lead to a false sense of security. Rather than diversifying risk, traders may be amplifying losses if the US dollar moves against them.

GBP/USD Trading Strategy

A variety of strategies can be used on the GBP USD. Whether you rely on wave counts via Elliot Wave analysis, weekly pivots points, or 100-year forecast charts, there are several fundamentals:

Timing

The GBP/USD can be live traded 24/7. With that said, the best time to day trade the pair is when both the UK and US markets are open, between 08:00 – 10:00 GMT and 12:00 – 15:00 GMT. Spreads are often at their tightest as volume and profit potential increases.

Investors trading outside of these hours may need to post greater profits to compensate for wider spreads. Fortunately, there are still multiple forex index systems used to identify market opportunities and support and resistance levels.

News

For those that want to avoid using 1 minute, 15-minute, yearly or 10-year forecast charts, economic reports can be used instead. Daily forex news releases and index forecasts are a great source of information. Data regarding unemployment rates, public sentiment and economic growth can all inform trading decisions. Yahoo Finance, DailyFX and Google Finance are popular news outlets for GBP/USD updates.

Risk

Traders should aim for strong risk-reward ratios when trading GBP/USD. A ratio of 1:4, so risking 250 pips for a return of 1,000 pips, will help balance volatility with profits. Using the 1% rule is also good practice. The 1% rule dictates that investors don’t risk more than 1% of their total portfolio on a single trade. This will help control losses and facilitates longer-term investing success.

GBP Vs USD Forecasts 2023

Many brokers and traders use long-term forecasts and outlook predictions to inform investment decisions. Staying up to date with today’s political and economic events is a good place to start. Whether you go on to shape your breakout strategy using live rates or technical analysis on 5, 20 or even 100-year charts, it’s important to keep up with the basics.

Final Word On GBP/USD

Investing in the GBP/USD currency pair continues to be popular among UK traders. High volume and volatility, along with tight spreads, make it a go-to FX major. There are also multiple investment vehicles available, from futures and options to day trading instruments. Of course, as with all online trading, a careful approach to risk management must be incorporated into strategies.

Find out more about forex trading.

FAQ

How Do I Buy GBP/USD?

To trade GBP/USD, users need to set up an account with a forex broker that offers trading in the currency pair. The account set-up process tends to be straightforward. From there, you just need to deposit funds and then you can start investing.

How Will The GBP/USD Pair Perform In 2021?

Whilst broadly speaking the dollar has suffered a dip following the coronavirus, it’s likely to remain comparatively strong as the global economy recovers. For Britain and sterling, following the 2008 recession and an unpredictable Brexit scenario, the GBP is unlikely to reach its 2020 rates for some time.

Is Investing In The GBP/USD A Good Idea?

GBP/USD can be an attractive trading proposition owing to its volatility, high volume and accessibility. Many of the best forex brokers also offer trading on the major currency pair. However, there are drawbacks so traders should ensure they understand the risks before investing. Leveraged forex trading, for example, can lead to serious losses.

What Is A Good Day Trading GBP/USD Strategy?

A tight risk management strategy should form the foundation of any investing strategy. Building upon that, investors can try day trading breakout strategies using technical analysis or longer-term investing based upon fundamental news. Different systems will work at particular trading times. The right strategy will also depend on individual risk appetite and capital requirements.

What Should I Look For In A GBP/USD Forex Broker?

To start trading GBP/USD you will need to open an account with a forex broker. Always use a regulated broker and thoroughly research the provider before making a deposit. See our list of reviews for a breakdown of the top providers by platform, fees and trading tools. The best brokers also provide the latest detailed forecasts for this week, next week and future months.