EUR/USD Live Chart

The EUR/USD pair is by far the most traded currency pair in the Forex world. There are no actual specific figures, but the general assumption is that over 85% of Forex trades that are placed on any given day are in this pair. With that being the case, entire careers are made by simply trading this particular currency pair. With the massive amount of liquidity in this market, it stands to reason that this pair is by far the most watched pair by news outlets and trading firms.

EURO/USD Live Chart:




 

The European Union and the United States are the two largest markets in the world as far as value. Because of this, the EUR/USD pair is essentially a measure upon global trade. The US dollar represents safety, while the Euro represents investment abroad by a large New York firms. However, the Euro itself is somewhat of a safe haven at times, depending on the currency it’s traded against. In this particular instance though, the Euro is considered to be the “riskier” currency of the two. With that, the EUR/USD will track higher based upon risk appetite going higher. Needless to say, the exact opposite is true as well.

When is the Best Time to Trade the EUR/USD?

With this particular currency pair, there is no bad time to trade, except perhaps the couple of hours between the US and Asian sessions when the market on the whole is fairly quiet. Beyond that though, this pair being as liquid as it is makes it easy to trade around the clock. As mentioned previously, some traders will only trade this particular currency pair based upon the fact that it is easy to trade with a small spread, and small chance of gapping.

What Major Events Impact the EUR/USD?

There are a lot of announcements that can affect this currency pair, with the most obvious one being interest-rate announcements out of both the Federal Reserve, and of course the European Central Bank. Under most circumstances, this pair will follow interest-rate differentials, going in the direction of the currency that offers more interest based upon the bond markets. However, there are several other things that can come into play as well.

The Nonfarm Payroll numbers out of the United States of course play a major factor in which direction this pair will go. That is simply because the Federal Reserve will raise or lower interest rates based upon the employment picture and America. EU employment numbers also have an effect on this marketplace, as they too will have an effect on interest rates in the European Union. Other announcements they can come into play are ones that are based upon the German economy, as it is roughly 85% of the value of the European Union. Because of that, you can think of the Euro as a proxy for Germany.

Quite often, this is the pair that people start out trading based upon the fact of it having such a small spread. Depending on the broker that you use, that spread can be as low as zero. However, most brokerages will have a spread of two pips or so. That of course is attractive to short-term traders as well, and over the last couple of years we have seen an influx of high-frequency trading, as the HFT firms have begun to look for opportunities outside of the stock market. With that, the liquidity remains high and only gets higher in this particular market.

The Euro is quite often thought of as the “anti-dollar”, and as a result of the liquidity this pair is roughly 60% of the value of the US Dollar Index. Because of that, this pair typically moves inversely of that futures contract. With that in mind, it is the chart that most news outlets will show during broadcasts as it gives a general idea of the value of the US dollar overall. As the value of the euro goes out, the value the US dollar almost has to go down and vice versa.

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