The EUR/GBP currency pair has been all over the place as of late, as can be seen by simply opening up the trading chart for the pair. All of this movement has led to tremendous opportunities for binary options traders recently. However, if you’re concerned that you missed your opportunity, don’t worry, there’s plenty more to come. Below, we’ll talk about why we’ve seen such a wild ride on the currency pair, what’s coming this month that makes it well worth watching, and what binary options traders should be watching for.
Why We’ve Seen Such A Wild Ride With The EUR/GBP
As mentioned above, when it comes to volatile currency pairs, the EUR/GBP has pretty much been at the top of the list for some time. The reason for this is relatively simple. It all surrounds a term that was invented less than 1 years ago, but has become instantly recognizable to anyone in the investing and economy community. That term is Brexit.
Last year, consumers in the UK voted for the UK to leave the EU. That’s a big step. Breaking up with the EU means that these economies won’t be as closely tied in the future as they have in the past, and if things go badly, there could even be a complete disconnect; a possibility that has become known as a Hard-Brexit.
Why This Is So Important For The EUR/GBP
At the end of the day, the EUR represents the European economy while the GBP represents the British economy. Both of these economies are part of what could become one of the largest shifts in the history of global trade agreements. At the end of the day, because the above currencies are representative of the above economies, both of their fate lies in the results of the Brexit.
Why This Month Is So Important
While the consumers of the UK did vote for the Brexit, the action hasn’t yet happened. In fact, at the moment, the relationship between the two economies is exactly the same as it was before the vote, at least, from a legal and economic perspective. For the Brexit to actually take place, the UK has to invoke Article 50.
Article 50 is a common reference to Article 50 of the Treaty of Libson. This article is the legal way to invoke a divorce from the UK and also provides the door in, but it is brief. Here’s what it offers…
“1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.
A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.”
While Article 50 has not yet been invoked, months ago, Theresa May said that it would happen by the 31st of March. From there, both the path and the result of the Brexit are relatively uncertain as no member has left the EU in the past.
What Binary Options Traders Should Be Watching For Ahead
Moving forward, binary options traders should be keeping a close eye on the Brexit story. As the story continues to unfold, we’re likely to continue to see incredible opportunities for binary options profits. In particular, watch the comments of leadership in both the EU and the UK, as a position of strength among leaders involved in the Brexit may lead to a perceived position of strength for the currency that represents the leader’s economy!
What Do You Think?