Today, the two currencies with the highest trading volume in both traditional and digital banking are the USD and the EURO.
The EUR/USD pair, which represents the highest trading volume in the forex markets, is the investment instrument.
Essentially, this pair mathematically expresses the Euro's value against the USD. If a forex investor anticipates a strengthening of the Euro for various reasons, they generally go long, but if the opposite occurs, they open a short position.
Unlike other currency pairs, this pair offers much higher predictability because these two exchange rates are directly affected by global developments.
Decisions by the United States' central bank and European Union policies directly impact this pair.
This structure allows for a direct correlation with global developments, making it easier for both beginners and professional investors to predict the EUR/USD price. This structure continues to be the pair with the highest trading volume.
Although it's an investment instrument with low volatility risk, the EUR/USD has occasionally experienced volatility during crises.
For example, during the US presidential elections and the period leading up to them, the value of this pair fell by nearly 5%.
What is EUR/USD in Forex Trading?
The EUR/USD in forex trading explained section defines the relationship between the USD and EURO as an indicator in the forex markets.
Because this pair contains the most liquid exchange rates, it is itself a highly liquid investment instrument.
Forex traders who open positions with this pair can more accurately predict its future trends, as it is affected not only by market factors but also by global developments.
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Investors implementing EUR/USD trading strategies should develop their fundamental analysis skills by monitoring global political developments, trade agreements, investments, and EU and US central bank decisions.
Why Trade the EUR/USD Currency Pair?
If you're considering risky but potentially profitable leveraged forex investments using highly volatile currency pairs, and if you're aiming for substantial returns with a small amount of capital, the EUR/USD pair isn't suitable for you.
Despite comprising two of the world's most liquid currencies, this pair also has two more stable exchange rates in terms of volatility.
Therefore, market fluctuations are much less than other pairs. However, its high liquidity and low spreads can be a significant opportunity for a professional and long-term investor approach.
Furthermore, unlike other pairs, it's closely linked to the political and financial conditions of the European Union and the United States, making it easy to gather signals about future trends.
Investors with extensive forex market experience and a strong financial literacy can accurately identify the impact of global developments on this pair.
There are several reasons why the EUR/USD forex pair is so popular among forex investors of all skill levels.
The most important of these can be listed as follows:
- Offering high liquidity
- Easy opening and closing of positions
- Suitable for both short-term and long-term investor profiles
- Low transaction costs
- Access to diverse data sets in technical analysis
- Opportunity to benefit from economic news
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Main Risks of Trading EUR/USD
While the EUR/USD pair offers numerous opportunities and predictability for investors, like any investment instrument, it can also pose some risks.
The main risks of trading EUR/USD forex in today's market conditions can be listed as follows:
- Risk may increase in leveraged transactions.
- Stop-loss orders must be carefully set and optimized.
- Position size may threaten financial stability.
- Volatility may sometimes reduce profit margins.
However, these risks are not experienced in every market condition or at all times. Investors' position sizes can vary depending on how they use stop-loss orders.
Furthermore, the biggest risk of EUR/USD trading is its low volatility, making it unsuitable for short-term trading objectives.
In other words, it's quite common for the EUR/USD pair to fluctuate even a single pip within an hour. This stagnant and stable structure can be listed as a risk for short-term traders.
What Factors Move the EUR/USD Price?
Unlike other currency pairs, this pair has a greater number of key factors that influence the EUR/USD price.
Among these, the most significant factors influencing EUR/USD movements can be listed as follows:
- Official interest rates announced in the US
- Interest rates announced by the European Union Central Bank
- Inflation rates in both regions
- Employment statistics
- GDP rates
If inflation data released for European Union countries is higher than the previous period, the EUR/USD price can generally increase.
However, occasionally, global political developments, in addition to financial policies in these two regions, can also cause volatility in this pair.
Instead of a one-sided perspective, you should develop a professional investor approach that evaluates all factors together.
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How to Trade EUR/USD CFDs with BlueSuisse?
Choosing a reliable platform for how to trade EUR/USD CFDs with brokers eliminates any doubts.
BlueSuisse is one of the best platforms for online forex trading, thanks to its compliance with international security protocols, its compliance with security standards such as KYC and AML, and its advanced digital infrastructure.
If you, as a forex trader, want to take advantage of the high liquidity opportunities of EUR/USD through leveraged trading, you can open your live trading account now through BlueSuisse.
Thanks to the advanced technical and fundamental analysis tools offered on this platform, you can continuously optimize your EUR/USD CFD trading and implement new strategies quickly and instantly via the mobile app.
However, you should still pay attention to leverage ratios and open positions that match your risk tolerance.
Many forex traders from around the world manage their forex strategies using the EUR/USD pair on this platform.
As part of our "beginner's guide to trading EUR/USD in forex," trading EUR/USD CFDs through this platform is quite simple.
Even if you are a beginner, you can quickly earn profits through leveraged transactions based on EUR/USD price movements thanks to the easy-to-use interface.