Currency pairs are another asset you can choose when you trade with binary options. There are many currency pairs that you can choose from, but one of the most important ones is the EUR/GBP. This is one of the most popular currency pairs and it is also part of “The Majors” – the group of the most traded currency pairs. The currency pairs included in this group are responsible for 85% of the entire Forex trading market.. Traders have nicknamed this currency pair Chunnel, because of the tunnel which connects UK and the rest of Europe.
This currency pair is often preferred by beginners, because it is fairly easy to predict its movement, especially if you have knowledge of the Fibonacci retracement, but we’ll talk about this in another article. Being one of “The Majors”, the EUR/GBP currency pair is traded a lot and its one of the most volatile Forex pairs, so binary option trading is fairly easy with it.
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So let’s take a closer look at the EUR/GBP. It consists of two of the most used currencies. The first one is the Euro, or the ‘base’ currency. The second one is the British Pound Sterling, or the ‘counter’ currency. Basically the EUR/GBP currency pair compares the value of the Euro in relation with the British Pound Sterling. To make it easier to understand, if EUR/GBP is quoted as 0.80, then this means that one Euro is exchanged for 80 pence or 0.80 British pounds. If the quote increases, then this means that the ‘base’ currency is getting stronger while the ‘counter’ currency is getting weaker.
The volatility of the EUR/GBP and its predictable behavior are the main reasons why it is preferred by binary options traders. This currency pair is particularly popular in the UK and Europe, because it contains two of the most popular European currencies.