From Pounds to Euros: Keys to Trading the GBP/EUR Pair in 2024

2026-01-06 18:07:23

Want to switch from pounds to euros profitably? The GBP/EUR pair represents one of the most interesting options in the Forex market for European traders. Below we show you how to take advantage of this highly liquid currency cross.

Trading opportunity in GBP/EUR

The cross between the British pound and the euro is a volatile and liquid instrument offering multiple possibilities. With a closing price recorded at 1.120 € ( figures as of 02/02 ), the pair has shown significant fluctuations: a 1.45% drop in the last month and 2.03% over three months. The trading range over the past 52 weeks is between 1.0786 and 1.2190 €.

For active traders, this controlled volatility precisely represents what they seek: predictable movement without abrupt changes that close positions. Unlike other minor pairs, GBP/EUR maintains robust liquidity during the European session, accounting for 35% of the daily Forex trading volume.

Three factors influencing GBP/EUR price

The legacy of Brexit (2016-present)

Since the 2016 referendum, the pound has lost prominence against the euro. Before that date, it traded above 1.30€; today it fluctuates between 1.06 and 1.21 euros. The biggest drop occurred immediately after the vote, when the pound suffered its worst day in three decades. New declines were recorded in 2017 and 2019, reaching historic lows against the euro.

The market sold pounds massively due to uncertainty over trade frictions and political volatility. As financial institutions unwound positions in sterling, the currency depreciated against its rivals.

Divergent monetary policy

The Bank of England and the European Central Bank (ECB) followed similar paths in 2022-2023: both raised interest rates. However, any future divergence will directly impact the exchange rate. If the BoE accelerates while the ECB stagnates, the pound would strengthen; the opposite scenario would weaken it.

Economic prospects slightly favor the Eurozone. The OECD projects zero growth in the UK for 2023 and recession in the coming quarters, while the EU maintains modest expansion expectations. Expected inflation of 11% in the UK contrasts with lower pressures in the Eurozone.

Market sentiment and economic news

Concerns about inflation, the Russia-Ukraine war, and employment data generate daily oscillations. Traders constantly monitor economic calendars to anticipate movements.

How to trade GBP/EUR via CFDs

If you want to switch from pounds to euros without physically holding these currencies, contracts for difference (CFDs) offer the ideal solution. With speculative CFDs:

You don’t need to hold actual euros or pounds in your wallet
You can open short (aiming at declines) or long (aiming at rises)
Profit is calculated as the difference between your entry and exit price
The liquidity of the GBP/EUR pair allows for quick order execution

To profit from a long position: your closing price must exceed your entry. For short: your exit must be below your entry. Simple: the difference is your profit or loss.

Timing strategy and technical analysis

Timing is everything

Maximum volatility occurs during the European Forex session (08:00-17:00 London time), when British and European institutions participate. This period coincides with peak volume and narrower spreads.

Avoid trading outside these hours; spreads widen and liquidity decreases, harming your profitability.

Technical analysis + economic news

Before each trade:

Check the economic calendar: BoE rate decisions, employment data, inflation
Identify trends using technical indicators: moving averages, RSI, MACD
Observe support (1.08€) and resistance (1.21€) levels over the past 52 weeks
Enter in the direction of the confirmed trend

Current outlook for GBP/EUR

In 2022, the pound fluctuated between 1.08€ and 1.21€. In mid-January 2023, it was at 1.124€, near four-month lows.

The pound has stabilized thanks to a light economic calendar, but attention: inflation expectations data before upcoming Bank of England announcements could trigger sharp movements. The BoE’s more cautious approach has pressured the currency, although positive employment figures could revive sentiment.

The UK’s economic recovery appears weak compared to Europe, but the market is unpredictable. Unknown events can always rewrite the analysis.

The historical context you should know

The GBP/EUR pair reached its all-time high at 1.752€ (May 2000) and a low at 1.02€ (December 2008). Looking too far back is counterproductive: the world changed since 2000. What matters is recent behavior: controlled volatility between 1.08 and 1.21€ defines the current operational range.

Conclusion: Is trading GBP/EUR worth it?

The pound-euro pair is one of the most monitored in Forex. If you are willing to trade pounds to euros speculatively, master these elements:

Trade during the European session (maximum volatility)
Monitor UK and Eurozone economic news
Use CFDs for flexibility in short/long positions
Respect technical levels confirmed by analysis
Invest only what you can afford to lose; Forex is risky

The pound has recovered from 2020 lows, but its trajectory remains marked by post-Brexit uncertainty. The euro, on the other hand, benefits from comparatively better economic prospects. This relative strength dynamic creates the opportunities traders seek.

The movement is more predictable compared to emerging pairs, but never guaranteed. Prepare well, respect the risk, and GBP/EUR could become your favorite pair.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.