Is the Euro-Pound difficult to trade in foreign exchange FX? We will explain the latest information on its characteristics and strategies. In this article, we will explain why trading the Euro-Pound is difficult, its reasons and characteristics, and the approach to successful trading.
Why is the Euro-Pound difficult to trade?
The Euro-Pound (EUR/GBP) is a currency pair consisting of the Euro (EUR), the common currency of the European Union, and the British Pound (GBP), and is known as a very difficult currency pair to trade. In this article, we will explain why trading the Euro-Pound is difficult, its characteristics, and approaches to successful trading. Even if you look at the chart, even if swaps are applied, pips do not move much because there is correlation. Even if you look at the forecast, it does not move easily. It is not recommended for automated trading.
Low volatility
The Euro-Pound has low volatility and limited price fluctuations compared to other major currency pairs. This is due to the fact that the Eurozone and the UK are closely linked geographically and economically, making it difficult for large exchange rate fluctuations to occur in a short period of time. For this reason, it is more difficult to “make a profit from small movements” than other currency pairs, and many traders find it particularly difficult with short-term strategies such as scalping and day trading.
Complexity of economic and political factors
The Euro-Pound requires extensive fundamental analysis to trade successfully, as it is necessary to take into account both the economic situation of the Eurozone as a whole and the economic situation of the UK. The euro is a currency made up of multiple countries, and while the economic indicators of each country have an impact on it, the pound moves due to factors related to the UK alone. In addition, the relationship between the UK and the EU after Brexit is complicated, and political uncertainty is likely to affect exchange rates.
In particular, the European Central Bank (ECB), which is responsible for the EU’s monetary policy, and the Bank of England (BOE), the central bank of the UK, often take different policies, making it difficult to understand and predict their decisions.
Complexity of correlation
The euro-pound can have a strong correlation with other currency pairs. For example, if it is highly correlated with the euro-dollar (EUR/USD) or the pound-dollar (GBP/USD), market analysis becomes complicated because it is necessary to grasp the movements of these pairs at the same time. Since correlations fluctuate depending on the time of year, traders must widely observe the movements of the entire market.
Many short-term fluctuation factors
The euro-pound is sensitive to political events and the release of economic indicators. For example, short-term price movements may occur every time the European Union’s economic indicators, Germany’s growth rate, the UK’s inflation rate and employment statistics are released. In addition, Brexit-related news and trade negotiations with the EU may suddenly affect the market, making it difficult to predict. It is difficult to make a judgment without taking these factors into account. If you do not use margins well, you will be caught in a falling market and will incur losses in the market, so be careful. Investment products are not guaranteed, so it is essential that customers predict the rate firmly.
EUR/GBP Trading Strategies
Now that we understand why trading the euro and pound is considered difficult, we will introduce some effective trading strategies. The price movements are different from those of the Japanese yen and Swiss franc. When logging in and managing your assets, be careful as the value can rise or fall significantly depending on the economic policies of the UK and EU. Forex margin trading, stocks and CFDs, the game is all about settlement.
Swing Trading
Due to the low volatility of EUR/GBP, swing trading is often more effective than short-term trading. In swing trading, positions are held for several days to several weeks, targeting major trends and reversal points. The key is to use indicators such as moving averages, RSI, and MACD based on technical analysis to determine the timing to ride the trend.
Crossing Moving Averages: The points where long-term and short-term moving averages cross can be used to determine buying and selling signals.
Chart Pattern Analysis: Since EUR/GBP moves relatively stably, trend following using patterns such as double tops, double bottoms, and triangles is effective.
Focus on Fundamental Analysis
Fundamental analysis based on the economic situation of the eurozone and the UK and the policies of the central banks is particularly important. Pay attention to interest rate announcements from the ECB and BOE, economic growth rates, inflation data, etc. to predict medium- to long-term trends.
Check economic indicators: Eurozone and UK economic indicators (GDP, unemployment rate, inflation rate, etc.) can help you find trend reversals and entry timing.
Pay attention to political events: News and political events are also important, especially since the UK’s departure from the EU, trade negotiations between the EU and the UK and other geopolitical risks can have a significant impact on the exchange rate.
Contrarian strategies using Bollinger bands
The EUR/GBP is often in a range market where the price moves within a certain range. For this reason, a contrarian strategy using Bollinger bands is effective.
Utilize the upper and lower limits of the bands: A strategy of selling when the price reaches the upper limit of the Bollinger band and buying when the price reaches the lower limit is suitable for range markets like the EUR/GBP.
Target a breakout
The EUR/GBP is usually low volatility, but breakouts can occur during important news or events. A method of targeting a breakout is to enter when the price breaks out of a certain range and use that momentum to make a profit.
Identify support and resistance levels: Based on past price trends, set strong support and resistance levels, and enter when the price breaks through those levels.
The Importance of Risk Management
Risk management is essential when trading the EUR/GBP. If you let your guard down just because of low volatility, you could suffer large losses due to sudden news.
Use stop losses: Be sure to set stop losses in case of unexpected movements. This will help prevent large losses.
Use appropriate leverage: If you use too much leverage, even small price fluctuations can lead to large losses. It is important to trade with moderate leverage and reduce risk.
Introducing overseas FX with high contract power
Now, let’s introduce some overseas FX companies with high contract power. We have selected some very popular and reliable brokers and compiled them into a list, so we hope you will find it useful. Before joining, please check out the videos and features on the page and consider them. You will also need to prepare your own funds.
XMTrading
XM actually has three companies. When you search online, you will find three hits: XM.com, XMtrading.com, and XMGlobal. Among them, XMTrading offers a comfortable environment for Japanese users, and is highly recommended as it has KIWAMI and Zero accounts.
| Brand name | XM | XMTrading | XMGlobal |
| Operating company | Trading Point Holdings LTD | Tradexfin Limited | XM Global Limited |
| URL | www.xm.com | xmtrading.com | xmglobal.com |
| location | Cyprus | Seychelles | Belize |
| license | FCA、ASIC、CySEC | FSA | IFSC、DFSA、ASIC、CySEC |
| Service Countries | Europe | Asia | others |
FXGT
FXGT is a relatively new FX company established in 2019. The operating company is 360 Degrees Markets Ltd., with a registered address in the Republic of Seychelles. Originally, they also offered services called Global GT and Crypto GT, but they were merged into FXGT in 2023. Of course, they also have a financial license, so you can rest assured that they have a high reputation among people. In the past, they have added many bonuses, and they are a good deal as they are a top-ranked broker.
| Operating company | 360 Degrees Markets Ltd. |
| Registered address | セーシェル共和国 Room 12, First Floor, Kingsgate House, Victoria, Mahe, Seychelles |
| Financial License | FSA: Seychelles Financial Services Authority |
| Established | 2019 |
Axiory
Axiory is an overseas FX broker established in 2015 by Axiory Global Ltd. Axiory is headquartered in Belize and incorporated as a “tax haven”. It has obtained the IFSC license from the Financial Services Agency of the Belize International Financial Services Commission, making it a very reliable and safe FX broker.
| Operating company | Axiory Global Ltd. |
| Established | 2015 |
| location | No. 1 Corner of Hutson Street andMarine Parade Belize City, Belize |
| Financial License | IFSC: Belize International Financial Services Commission |
Bigboss
BigBoss is an FX company established in 2013. It is based in Saint Vincent and the Grenadines and is operated by Prime Point LLC. It has a good reputation among traders and has not experienced any major problems or withdrawal refusals, so it can be said to be a very reliable company.
| Company | Prime Point LLC |
| Found | 2013 |
| Address | 1/F, First St Vincent Bank Ltd Building James Street Kingstown St. Vincent and the Grenadines |
| License | SVG FSA |
easyMarkets
easyMarkets was founded in 2001, making it by far the oldest company among overseas FX brokers. It is operated by EF Worldwide Limited, and is an FX broker based in the Marshall Islands. The Marshall Islands are a tax haven, so they tend to be the base of FX brokers.
| Operation Company | EF Worldwide Limited |
| Address | Ajeltake Road, Trust Company Complex, MH 96960, Ajeltake Island, Majuro, Marshall Islands. |
| License | CySEC,ASIC,FSA,FSC |
| Found | 2001 |
| URL | Click here |
Exness
Exness is a world-famous FX brand founded in 2008 with global expansion. It is a multinational corporate group that has obtained official financial licenses in multiple countries, including European and overseas subsidiaries and affiliates. As of April 2022, it boasts a trading volume of over 2105 trillion dollars.
| Operating company | Exness Limited |
| Registration number | 8423606-1 |
| Country of registration | Japan-Seychelles Relations |
| Company Address | 9A CT House, 2nd floor, Providence, Mahe, Seychelles |
| Established | 2008 |
| Number of Employees | 1054 |
| URL | Home Page |
| telephone number | (+248) 4346767 |
| email address | support@exness.com |
| Financial License | Seychelles Financial Services Authority |
FBS
FBS is an FX broker based in Vanuatu. Founded in 2009, it is a FX broker with a long history of operation. It has successfully expanded globally and has branches all over the world. It also has a financial license. It is well-known among overseas FX brokers, and deposits and withdrawals are safe.
| Operation Company | Mitsui Markets Ltd. |
| Established | 2009 |
| Address | 133 Santina Parade, Elluk, Port Vila, Efale, Vanuatu |
| License | VFSC、IFSC、CySEC |
HFM
The company profile of HF Markets is as follows. The company name has always been Hot Forex, but it changed to HFM in 2022. HFM is a very popular company, especially in Europe, and has won more than 60 awards, so it is very popular and well-known.
| Company Name | HF Markets(SV)Ltd |
| CEO | – |
| Found | 2010 |
| Address | Suite 305, Griffith Corporate Centre, P.O. Box 1510, Beachmont Kingstown, St. Vincent and the Grenadines. |
| Capital Stock | ? |
| Number of employees | 250 |
| support@hfm.com | |
| Licence | IBC No: 22747 IBC 2015 St. Vincent and the Grenadines |
| URL | Home Page |
iForex
iForex is a very long-established FX company, and this alone makes it trustworthy. The operating company is Formula Investment House Ltd, which was established in 1996, so it has a history of 30 years. It is based in the British Virgin Islands and has a financial license registered with the Financial Services Commission of the British Virgin Islands (BVI FSC).
| 運営会社 | Formula Investment House Ltd |
| 設立 | 1996 |
| 所在地 | 1, Wickham’s Cay, Road Town,Tortola BVI VG1110 |
| 金融ライセンス | BVI FSC：英領バージン諸島金融サービス委員会 |
IronFX
IronFX is a globally expanding FX broker established in 2010. As service information is provided worldwide, there are many registered users in Europe, Asia, the Middle East, Africa, and Latin America, and awareness is increasing. IronFX is recognized as a fast-growing FX broker, and in 2012 it won the Best Trading Platform 2012 award.
| Broker | IronFX |
| Established | 2010 |
| Headquarter | Cypros |
| Service Area | Europe Asia Africa Oceania North America South America |
| License | CySEC FCA ASIC |
| Address | 2, Iapetou Str., Agios Athanasios, 4101 Limassol, Cyprus |
| Tel | +44(0) 203 282 7777 |
| Owner | Markos A. Kashiouris Peter G. Economides |
| Company Name | Notesco Limited |
| URL | Home |
LandPrime
Land-FX is an FX broker established in 2013 by the operating company Land Prime Ltd. It has been in operation for over 10 years, so it can be said to be a fairly established broker. Its greatest appeal is its narrow spreads and high contract power, and it has traders all over the world.
| Operation Company | Land Prime Ltd. |
| Established | 2013 |
| Address | ? |
| License | SVG FSA |
| URL | Home |
MILTON MARKETS
MILTON MARKETS is an FX company established in the Republic of Vanuatu in 2015. It is regulated by the Vanuatu Financial Services Commission and has a financial license from the VFSC, so it is a very reliable company.
| 運営会社 | Milton Markets Ltd. |
| 設立 | 2015 |
| 所在地 | バヌアツ共和国 2nd Floor, Transpacific Haus Lini Highway Port Vila, Vanuatu |
| 金融ライセンス | VFSC：バヌアツ金融サービス委員会 |
GeneTrade
GeneTrade is an FX service company established in 2018 by the operating company Genius Trading LTD. The company is headquartered in Belize and holds a financial license from the Belize International Financial Services Commission (IFSC), so it is operated under regulations.
| Operation Comapany | Genius Trading LTD |
| Found | 2018 |
| Address | 5 Cork Street, Belize City, Belize |
| License | IFSC |
TITANFX
TITANFX is an FX company established in the Republic of Vanuatu in 2014. It offers a wide range of services, including free VPS, free EA, and copy trading, and is highly recommended. The maximum leverage is 500x, so you can deposit and withdraw funds with peace of mind.
| Operation Company | Titan FX Limited |
| Establishment | 2014 |
| Address | Pot 564/100, Rue De Paris, Pot 5641, Centre Ville, Port Vila, Vanuatu |
| Financial license | VFSC |
TradersTrust
It is now TTCM TRADERS CAPITAL LIMITED, a group of companies that operate TradersTrust, and was founded in 2009. It is headquartered in Cyprus and is regulated by the Cyprus Securities and Exchange Commission (CySEC), which is difficult to obtain.
| Operation Compamy | TTCM Traders Trust Capital Markets Limited (ltd) |
| Found | 2009 |
| Address | 3 Thalia Street, Office Number 310-318, 3rd Floor, 3011, Limassol, Cyprus |
| License | CySEC |
Axi
We will explain the basic information of Axi. Axi is an FX broker established in Australia in 2007. Of course, it holds a license from the Financial Services Agency and is one of the famous brokers with many users. All account types offer up to 1,000 times leverage.
| Broker | Axi |
| Established | 2007 |
| Max Leverage | 1000x |
| License | SVG ASIC FSA |
| Trading Tool | MT4 |
FXPRIMUS
The basic information of FXPRIMUS is as follows. Naturally, it holds a financial license and is operated under strict regulations. It has bases in Vanuatu and Cyprus and has obtained licenses from the financial authorities of each country.
| Broker | Primus Markets INTL LTD(Cyprus) Primus Global LTD(Vanuatu) |
| Location | Cyprus Vanuatu |
| License | CySEC VFSC |
| Established | 2009 |
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