According to real-time market data, EUR/USD is known to be the most popular and highest trading volume pair in the forex markets.
The primary reason for this pair's popularity is its composition of the “EUR/USD explained”.
These two currencies are the two most liquid currencies under current global trade conditions. This has made them a frequent choice for investment projects throughout history and within financial ecosystems.
This pair, one of the best choices for beginner forex investors, can be defined as the “EUR/USD definition in forex” value against the USD.
While global crises have historically affected these two currencies, and the EUR/USD pair has fluctuated, it can be considered the most reliable and liquid currency pair, barring extraordinary market conditions.
Beginner investors, especially those exploring the forex markets and learning the basics of forex trading, can confidently choose EUR/USD when they want to manage their portfolios with safer investment instruments.
Analyzing this pair using technical analysis tools is essential for accurate buying and selling timing.
Therefore, although it's an investment instrument with low volatility, professional forex traders who aim for returns based on small changes must be able to read these charts.
Thanks to its world-class digital infrastructure, BlueSuisse offers the tools you need for analytical processes to ensure your portfolio remains strong and resilient, even in the face of potential market shocks.
What Is the EUR/USD Currency Pair in Forex?
If a definition of "EUR/USD in forex" were to be explained for beginner traders taking their first steps in the forex markets, the term "forex investment instrument expressing the value of the Euro as the base currency against the USD" would suffice.
This most popular pair is generally shaped by internal and external market factors related to the USD and the EURO.
However, this reshaping process does not pose a risk in terms of volatility. It is the pair with the least fluctuations under current market conditions. Currently, the EUR/USD pair's value is around 1.10.
This value does not fluctuate dramatically despite factors such as numerous out-of-market interest rate decisions. This stable structure makes this pair a suitable investment instrument for both beginner forex traders and professional investors with long-term investment approaches.
Key Points Before Trading EUR/USD
If you plan to trade this currency pair, there are some key points to consider before trading EUR/USD. The most important of these are listed below:
- Liquidity: This concept refers to how easily and quickly an investment instrument can be bought and sold, not only in the forex markets but also in almost every investment model. If you are looking for an investment instrument with high trading volume and liquidity, EUR/USD will be one of the best choices. Due to the intensity of global trade and the political stability of the countries and regions they belong to, USD and EURO pairs will remain the safest havens in terms of liquidity for a long time.
- Volatility: This concept refers to the potential for fluctuation in the value of an investment instrument in a market. Volatility risk in forex markets is not solely determined by investors' supply-demand balance. Non-market factors such as ECB interest rate decisions, FED announcements, inflation data for the US and EU, and economic growth statistics can cause changes in the value of the USD and EURO, thereby causing fluctuations in the EUR/USD pair. However, these changes are not as significant as those in other currency pairs. Therefore, investors who want to continue their forex trading process with reliable investment instruments in terms of volatility can easily trade EUR/USD.
- Spreads: The difference between the ask and bid prices of a currency pair is a crucial indicator for short-term forex traders. However, the spread between EUR/USD is always large enough to maintain investors' psychological well-being. Investors seeking long-term protection of the capital they allocate for investment projects can choose this pair, as it is one of the most reliable options in terms of spread.
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The History of the Euro and Its Impact on EUR/USD
The euro is one of the most popular currencies used in the European Union. It has been used as the official currency in various parts of the world since 2002. Due to the European Union's power in global trade and politics, it remains one of the most valuable, safe, and liquid currencies.
Furthermore, the USD, the quoted currency for the EUR/USD pair, is equally popular as the EUR. The US is one of the most powerful countries, both politically and financially, in current global developments.
This political power and financial stability have always made the USD, the official currency of the US, reliable in terms of volatility and liquidity.
However, even these two safe-haven currencies, and therefore the EUR/USD pair, have experienced fluctuations from time to time throughout history.
The most influential of these are:
- The 2008 global crisis
- The 2012 European debt crisis
- The 2019-2020 COVID-19 and subsequent interest rate policies
How to Read EUR/USD Price Charts?
It is crucial for investors to analyze the historical price movements of currency pairs listed in the forex markets and obtain accurate EUR/USD trading insights.
In this process, both technical analysis tools and fundamental analysis approaches offer the most effective analysis solutions for trend following.
However, interpreting data sets consisting of historical EUR/USD price movements using charts and indicators with a more professional approach requires experience and training.
Nevertheless, we can recommend some tips for beginner forex investors when analyzing EUR/USD price charts.
These tips can help beginner forex traders try to interpret data sets consisting of historical EUR/USD price movements from a professional investor perspective.
These tips can be listed as follows:
- Chart Types
- Trend Following
- Support & Resistance Levels
- Indicators.
Using these different technical analysis tools, investors can develop strategies consistent with the "EUR/USD forex trading basics." Through BlueSuisse, investors can implement data-driven strategies using technical analysis tools and securely protect their assets within the highest-level security protocols. Open your live trading account with BlueSuisse and start trading now!
Predicting future trends through bar and line charts, discovering emerging trends, managing the timing for buy-sell points correctly, and using common indicators such as RSI and MACD are very useful for a data-driven analysis process.