Higher volatility of the GBP

The graph is showing the difference between the white and red lines, and as the difference between them is larger, then the bigger the volatility as well for the EUR/USD pair in this case.

The graph shows the comparison between the volatility of the EUR/USD and GBP/USD. The Euro has been volatile even before the referendum in the UK and it remains as is.  However when we look at the GBP/USD, before the vote at July, 2016, it is showing very low volatility as the two lines, blue and green are very close together, almost perfectly overlapping each other. But after Brexit, both lines start to separate and there is a difference between them, which shows higher volatility and the chances are to stay that way.

We also see a possible triple bottom at around 1.20 for the pair and after the EUR/USD has started to go up, that can be possible for the GBP/USD as well.

After the activation of Article 50 later this month, it is likely that the volatility of the pair will raise again. Higher volatility can be a good thing for traders and successful trading.

Chart: Bloomberg

Read more:

• GBPBGN: increase in price is more probable from the current levels
• EURGBP: probability for an upcoming downward impulse
• GBPUSD short term sentiment in front of important data at 11:30 (GMT+3)
• A price below 2.268 can lead to a new decline by the pound
• Pound rises after the defeat of May’s Brexit deal