GBP/USD Chart

GBP/USD, THE CABLE

The GBP/USD (British Pound/U.S. Dollar) is the abbreviation for the British pound and U.S. dollar currency pair. Also called “the cable”, this cross belongs to the group of ‘Majors’. In the last 5 years, the GBP/USD reached its maximum price of 1.7169 in July 14 and a record low of 1.2065 in January 2016.

The indices that most impact can have on the GBP/USD moves are the FTSE 100 (share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization), ICE Brent Crude (futures contract is a deliverable contract based on EFP delivery with an option to cash settle), FTSE All-Share Index (a capitalisation-weighted index, comprising around 600 of more than 2,000 companies traded on the London Stock Exchange), FTSE techMARK Focus Index (derived from the FTSE techMARK All-Share Index, represents the performance of innovative and technology companies that are listed on the London Stock Exchange's "techMARK" market).

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HOW TO USE THE CHART - OPTIONS TO CUSTOMIZE

If you click on Chart Tools , you will see the chart full screen with all the options and tools.

Horizontal bar options:
At the top of the GBP/USD chart, you have the following features for you to customize it:

• Save and Load: you can create and save your favorite configurations for future usage. You can also replicate a template from one chart to other charts.
• GBP/USD: on this chart, by default, you will see the GBP/USD but you can change it and choose another asset
• Timeframe: from tick-by-tick to yearly
• Chart type: candlesticks, line chart, bar chart,...
• Compare charts: you can analyze the price history of two assets and analyze relative performance over a period of time. You can also benchmark an instrument to an index.
• Show additional data on the chart: Percentage scale (%): The first loaded Close price represents 0%. This mode is useful to compare the performance of several symbols; Volume: Show or hide the volume of the main symbol in a new panel; L: Show or hide Last Value
• Add indicator: choose among over 70 technical indicators to add on your chart. Indicators are applied to the price data of the main symbol in your chart.
• Reload, Zoom in/out, Print, Export as PNG image, Set the zero point, Open in full screen, Sound notifications on/off

Vertical bar options:
At the left of the GBP/USD chart, you have the drawing tools like trend lines, trend channels, Fibonacci retracements and many more to interpret the price development of a symbol. With most drawing tools, you have to define one or more reference points that indicate where the drawing object should be placed on the chart. You can later move these reference points by dragging them with the mouse.

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COMPLEMENTARY TOOLS

To complete your analysis of the GBP/USD, we recommend you to have a look at the GBP/USD Forecast Poll, an exchange rates heat map of where sentiment and expectations are going.

You can also consider using the FXS Technical Confluences Detector is an in-house tool, developed by FXStreet experts, that allows you to identify those price levels where congestion of indicators like moving averages, Fibonacci levels, Pivot Points occurs. Knowing where these congestion points are located is very helpful as it allows the trader to see these areas of support and resistance easily.

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Currencies

This group includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, USD/CAD and EUR/GBP.

WHY USING A CHART TO TRADE THE GBP/USD?

There are two main methods to estimate where a currency is heading: analyzing the economic fundamentals and analyzing the price action through technical analysis. The second are graphical representations of the exchange rates like you see above. Price charts are primarily a graphical display of price information over time. They show supply and demand levels represented through price patterns which can be recognized visually. As a numerical sequence, price series can also be technically analyzed using mathematical formulas, represented by technical indicators.

When looking at the GBP/USD chart you can see if the currency pair, or in other words, the exchange rate between the British Pound and the US Dollar, is rising or falling. A simple rule to understand the exchange rates would be to think of the base currency (GBP) as one unit of that currency being worth the value of the exchange rate expressed in the quote currency (USD). - Read more

Volatility is widely used by traders when looking for good breakout trade opportunities. Volatility measures the overall price fluctuations over a certain time. One famous indicator of volatility is called the VIX, which is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index. It shows the market's expectation of 30-day volatility. In an instructive video, Nicole Elliott the sometimes called “fear index” and details the process of studying volatility indices with volume and open interest to time the market. Elliott explains concept of implied volatility, realized volatility, implied volatility and presents her view on GBP/USD and EUR/USD with the help of price chart, volatility indices, volume and options data. - Watch video

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MOST INFLUENTIAL ECONOMIC DATA FOR GBP/USD

The economic indicators that might have the most significant impact on the price of the GBP/USD pair are:

• UK GDP (Gross Domestic Product) released by the National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).
• BoE Interest Rates: the Bank of England meets and establishes every month the interest rates for the country. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates, it is positive, or bullish, for the GBP. (See our Worldwide Interest Rates table)
• Unemployment Rate: Usually, a higher rate of unemployment is seen in recessionary economies. A decrease of the figure in a country is seen as positive (or bullish) for its currency, while an increase is seen as negative (or bearish). In the USA, the number by itself can't determinate the markets move as it depends on the headline reading, the Nonfarm Payroll that is published the same day and presents the number of new jobs created during the previous month, in all non-agricultural businesses.
• Trade Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. If a steady demand in exchange for US exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the USD. The same applies to British exports for the GDP.
• Inflation indicators: the CPI (Core Price Index), a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services, and the PPI (Production Price Index), a monthly measurement of the rate of inflation experienced by the UK manufactures when buying goods and services. They are key indicators to measure inflation and changes in purchasing trends.

Also taken into account by GBP/USD fundamental traders are the UK and US Government Debt to GDP, (a low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt) and UK and US Unemployment rates.