Each Forex broker offers different trading instruments, and currency pairs are the main ones quite a lot on each site. The main currencies in the world market have always been considered the euro and the US dollar. And in a pair, this instrument is traded on every financial exchange. The EUR/USD currency pair is regarded as the most purchased in the world. But besides the fact that all traders choose this tool, these major currencies affect the growth and fall of all others.
The euro was introduced to facilitate cross-border trade between EU countries on December 31, 1998, at the exchange rate of 1.1686 US dollars. Initially, the digital accounting currency was put into circulation in 11 EU countries on January 1, 2002, and on that day, trading ended at 0.8605 US dollars. Since then, the use of the euro has expanded and to date includes 19 of the 28 EU members.
The euro/dollar rose from 0.8625 to 1.5830 between January 2002 and March 2008, partly due to increased trade between EU countries. However, it fell significantly as a result of the financial crisis of 2008, reaching 1.2674 in February 2009. The pair's value continued to fall in subsequent years, then liquidity in US dollars decreased, and the euro/dollar fell to 1.0500 at the beginning of 2015. Since then, the Euro-dollar has traded between approximately 1.0500 and 1.2500 (as of October 2018). Further, prices changed depending on the political and economic situation in the world, and the current rate of this pair can be found on the broker's website.
The central aspect of why you should choose the currency pair of Euro and the US dollar is the availability of forecasts and exchange rates. These currencies are known all over the world, and we hear any changes in the exchange rate in the news, see in banks, and can read on the Internet. That is, it is not difficult to predict these rates of these currencies, moreover, with the presence of such an amount of information.
The second main reason why traders choose the euro/dollar currency pair is the volatility of this pair. This makes trading a little riskier but gives a chance to earn more. But this way of trading is predominant for short-term transactions, which requires more attention from the trader.
Well, the third aspect is that when trading this currency pair you cannot completely lose all your savings, even if the rate drops very much, then the direction may change in the speed of time. So a kind of stability and volatility are preferable in trading these currencies.
First, let's deal with the principle of trading a currency pair. It's quite simple. If you read the news or do some analytics and understand that the US economy will continue to weaken, this means a harmful effect on the US dollar, in which case you must execute a purchase order EUR/USD. Thus, you bought the euro in the expectation that its rate will rise against the US dollar.
If you understand that the US economy is strong and the euro will weaken against the US dollar, you must execute an order to sell EUR/USD.
Thus, you are selling the euro in the expectation that the exchange rate will drop against the US dollar. The main thing that you will need when trading is the EUR/USD currency chart. The popularity of the EUR/USD pair, both among beginners and among professional traders, makes it essential to understand how to read the EUR/USD chart.
We will tell you how to understand the schedule. In any currency pair, the first currency indicated is the base currency, and the second is the quote currency. In the current EUR/USD indicator, the euro is the base currency, and the exchange rate shows how many units of the quote currency you get for one unit of the base currency. If the EUR/USD currency pair is trading at 1.2500, this means that you will receive $ 1.25 for each euro sold. When you see price increases on a chart, this can mean one of three things. The value may indicate that the euro is strengthening, that the dollar is weakening, or that both actions are happening simultaneously. Some traders apply various forms of technical analysis to their charts to make EUR/USD forecasts. If you look at price patterns or critical news events, a chart can give you an idea of current trends.