Today, one of the most popular trading instruments in the forex market is the EUR/USD currency pair.
This asset is preferred by both experienced traders and forex beginners who are just starting their journey in the foreign exchange market. First of all, it should be said about the euro dollar pair that it has a trend movement, which allows you to trade by creating long-term transactions.
The main features of the currency pair
If you compare this currency instrument with other forex pairs, you will notice a natural trend following. Therefore, many experienced traders trade precisely on long-term transactions, in the direction of the chosen exchange rate.
It is important to note that within a trading day, the rate can change regardless of the direction of the trend line, however, on the daily and weekly charts, one can observe a clear following of a given trend.
That is why when trading with this currency instrument, it is best to use trend strategies.
In this case, within the trading day, you can suffer minor losses, which in the future will fully pay for themselves and bring huge profits, taking into account trading on a long-term basis.
Comparison of currency pairs
Many experienced traders have long noticed and put into practice some of the tricks of successful trading on the EUR/USD currency pair. The essence of which is that the intraday behavior of this trading instrument is most often similar to the behavior of such pairs as GBR/USD, EUR/GBR and USD/CAD.
First of all, this is due to the fact that the main trading of these pairs takes place during the European and American trading sessions. If we translate this into our Moscow time, then this is from 10.00 to 02.00.
However, the strongest volatility ends at the close of the European trading session, namely at 17:00 Moscow time.
In this time period, the EUR/USD currency pair can make significant adjustments, which often contradict the trend direction, however, its movement is almost identical to the changes in the GBR/USD pair, which allows experienced traders to get a double benefit by trading two currency instruments at once.
For those traders who have just begun to comprehend the peculiarities of trading on the stock exchange, the best option for trading the EUR/USD pair will be to profit on the flat at night, when the American trading session is already closed, and the Asian calm session begins its work.
In this case, significant adjustments to the euro-dollar exchange rate can rarely be made here. Most often at night, the pair moderately returns to the trend direction.
Characteristics of the EUR/USD currency pair
As mentioned earlier, this trading instrument most often has a trend movement, which can stretch up to several months. Most often, the movement of a currency pair can be changed with the release of serious news, as well as with a cardinal change in the policy of one of the states.
At the moment, this pair is traded by the largest number of traders around the world. An important indicator in this sense is the fact that the US dollar is a world currency and has maximum liquidity.
The same can be said about the single European currency euro, which also has a fairly high liquidity.
In this trading instrument, the euro is the main base currency, while the dollar, on the contrary, plays the role of a quote currency. Based on this, we get data on how many dollars you can get for one euro.
The trading instrument is in constant struggle, since both currencies are represented in large volumes on the world market, which is why there is strong competition and frequent price jumps in one direction or the other.
The quote is presented as an integer value and four digits after the decimal point. This moment is necessary for traders to obtain more accurate information about the subsequent possible price movement.
EUR/USD pair chart
The live chart for the EURUSD currency pair is ideal for analyzing and identifying the right moment to enter the trail.
Features of trading on the EUR/USD currency pair
The tool is perfect for advanced traders who know how to quickly navigate based on news events and respond to all possible changes in the direction of the currency pair.
A trading instrument is often subject to unreasonable ups and downs during the simultaneous operation of the European and American trading sessions.
That is why the ideal intraday trading method for the EUR/USD pair is pipsing and scalping.
Another important advantage of this trading pair is the minimum spread compared to other currency instruments. Most often, brokers set this value to no more than 3 points.
As mentioned above, the pair is quite dynamic, as a result of which, with the right choice of intraday strategy, profit can vary from 100 to 500 points of profit.
The impact on the US dollar is influenced by economic events within the country, such as the unemployment rate, changes in GDP, as well as fluctuations in property prices.
As for the single European currency, things are somewhat different here.
Any political event in any country of the European Union can provoke the growth or fall of the euro against the dollar.
It is for this number of reasons that trading on this currency instrument is not as simple as it might seem at first glance and is fraught with many hidden risks and threats.
However, a huge plus for choosing this particular currency pair for trading as the main instrument is the abundant help of all kinds of forecasts regarding the subsequent movement or change in the current trend.
That is why on the chart of a trading instrument it is quite easy to find the optimal moments for entering the market and subsequent profit.
History of the EUR/USD currency pair
Currently, this trading instrument is trading within 1.1720 to 1.1900. However, these figures are constantly changing depending on the policy of the United States or the European Union.
The historical maximum price of the euro against the dollar was reached in July 2008, when the price of the dollar for one euro fell to 1.6050. Another historical maximum that was played towards the US currency.
It was fixed in October 2000, when the price ratio fell to 0.8200.. At the moment, there have been no significant changes in the price value for quite a long time.
The pair rises or falls with alternate success, which allows traders to earn huge profits on minor changes in the EUR/USD trading instrument. This type of opening intraday trades is called scalping.
However, beginners who have not yet got their hands on trading will not be able to quickly master this method of trading, since a detailed study of the currency pair is required for many months or even years. That is why it is better for them to follow the course of the trend and wait for the release of important economic events.