The second most popular currency pair in the European Forex market is the British Pound (GBP) and the US Dollar. This currency pair, commonly known by the nickname "Cable," tends to have a negative correlation with USD/CHF and a positive correlation with EUR/USD.
🔸 History and Key Volatility of the GBP/USD Currency Pair
The GBP/USD currency pair is considered one of the oldest and most volatile currency pairs in the global market. The nickname "Cable" is derived from the telegraph cables under the Atlantic Ocean that were used in the 19th century to transmit exchange rates between London and New York.
🔸 Review of Important Historical Events
- 🔸 2007: Reaching an all-time high of $2.11 (the highest level in recent decades).
- 🔸 2008: Falling to $1.35 following the global financial crisis.
- 🔸 2016: Severe weakening of the pound, reaching $1.20 following the Brexit referendum.
- 🔸 2020: Falling to $1.14 (the lowest level in 35 years) due to the COVID-19 pandemic.
- 🔸 2021: Price returning to the $1.42 range with the relative improvement of the UK economy.
- 🔸 2022: Another fall to $1.03 following the energy crisis and runaway inflation.
- 🔸 2023: Price fluctuating in the $1.20 to $1.30 range.
- 🔸 2024: Price trading in the $1.25 to $1.35 channel.
- 🔸 2025: Relative stability of the GBP/USD in the $1.30 to $1.35 range.
- 🔸 2026: Price fluctuating in the $1.30 to $1.35 channel, with the market awaiting the next direction of monetary policies.
⚠️ Important Warning in Trading the Cable Currency Pair
Trading GBP/USD, due to its high sensitivity to political news (such as elections or government changes in the UK) and economic data (such as the CPI inflation rate and Bank of England - BoE decisions), can be accompanied by sudden and severe volatility. Always use precise capital management and a Stop Loss.
🔸 Supplementary Tips for Analysts
For a more precise analysis of this currency pair, in addition to reviewing technical analysis, one must continuously monitor the economic calendar of both countries (the US and the UK) as well as the US Dollar Index (DXY) to stay safe from market surprises.
Buy/Sell Signals Using Bollinger Bands 20
The Bollinger Band chart (from the Volatility Indicators category) is an analytical tool used to evaluate market conditions.
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