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Forex

How to Trade the EUR/USD Currency Pair: Professional Tips

The behaviour of the EUR/USD pair is a kind of indicator showing the comparative condition of the US and EU economies. If the US economy steadily grows, and problems arise in the EU, the EUR/USD decreases.

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EUR/USD is one of the most popular currency pairs for Forex trading. Since the beginning of trading in 1999, the currency pair has undergone significant changes. For the first two years, the future for the euro was uncertain and the quotation was declining, reaching a minimum of 0.8200.

Then, it was changing for seven years, reaching an all-time maximum of 1.6000 in 2008.

In subsequent years, due to the influence of the banking crisis and various problems in the Eurozone, the pair ratio has significantly changed. On October 14, the EUR/USD pair closed at 1.1700. So, what factors affect the EUR USD วันนี้ and how to trade it — read below.

Key Features of the EUR/USD Pair

These currencies belong to the majors and are characterised by increased liquidity. This is not surprising, since it includes two of the world’s major reserve currencies. This pair is characterised by the largest volume of transactions during daily trading on the Forex market (approximately 20% of the total volume).

Euro bank notes
Photo by Henrikas Mackevicius from Pexels

The behaviour of the EUR/USD pair is a kind of indicator showing the comparative condition of the US and EU economies. If the US economy steadily grows, and problems arise in the EU, the EUR/USD decreases. Alternatively, if there is a decline in growth rates in the US, and the Eurozone shows good performance, then the EUR/USD will grow. Let’s consider the main trading characteristics of this pair:

  1. Active trading time

The pair is traded around the clock except for weekends, and the most active time is during the European and American trading sessions. At this time, the largest trading volumes take place, as well as the main changes of the EUR/USD.

  1. Volatility

The EUR/USD pair is characterised by medium volatility. During the release of important data, the pair is capable of making strong movements from 100 points and above. But in general, if you look at the historical data, the average daily volatility of the EUR/USD is about 80 points.

  1. Spread

The spread is one of the main advantages of this pair. Due to the highest liquidity, the spread for the EUR/USD pair is minimal. On popular accounts, the spread is usually less than 1 point.

What Factors Affect EUR/USD Quotes?

The EUR/USD rate is the ratio of the currencies of the two largest economies in the world — the EU and the US. Therefore, important economic and political news directly affects the euro-dollar rate. These factors of influence are called fundamental, in addition to them, there are also technical ones.

For instance, an active trend is an essential technical factor for trading. During the uptrend, it is advisable to make purchases, in a downtrend — sales, while during the range — trading in both directions is appropriate. There are different approaches to trading, and each trader chooses his own style. Whatever method you will choose, take your time to test it in a demo account. Good luck!

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