Currency trading has grown to be appreciated in all corners of the world. The forex market being, the largest most liquid market in the world, has been on the rise in recent days.
Reasons why the currency pair (EUR/USD) has been on the rise
Just like stocks, you can also choose to trade currency. Based on your analysis if you think a currency will increase in value, you can buy it. On the other hand, if you believe a specific currency will decrease, you can sell it.
For example, EUR/USD is one of the most currencies that many people like to trade with. The reason being that Euro/dollar trades within a narrowing uptrend triangle and also tends to be the most liquid pair compared to other currencies pair. The second reason is that it represents the world’s largest economies and trading blocks.
Being the world most liquid currency pair, it offers the traders a consistent low spread throughout. This unique combination of liquidity and volatility of eur usd, the good thing with it is that it favours every trader, even the newbies.
The eur usd currency pair gathers two leading economies, the European and American, definitely from the United States of America. The Euro is the base currency, while the USD is the counter currency. Therefore, the pair will consist of more than half of all trading volume worldwide in the Forex Market; hence it is almost impossible for a gap to appear.
The History of the EURUSD
As the philosopher’s say history repeats itself, it’s hard for a person to imagine that this forex trading pair existed so many years ago. But that not the case it has just been around since 1999, that is when the European countries adopted a single currency. The currency has appreciated slowly as it is being adopted worldwide. You can now do your analysis of 20 years to come where these currency pair will be standing.
How to read the currency pair (EUR/USD) trading price?
Like any other currency pair in the forex trading market, the eur usd represents the price of the base currency, which is Euro and the usd represents the quote currency.
For instance, when the price of the EUR-USD currency pair is rising, it means that the Euro is strengthening over the USD. On the other hand, when the price of EUR-USD is slowly going down, these means that the value of the Euro is decreasing relative to the USD
Generally, the price quote of the EUR/USD will represent the amount of dollars it would take to get 1 euro. For example, when the price of the EUR/USD is 1.35, it means that if you want to buy 1 EURO, you will need to pay 1.35 US dollars. That’s how simple the calculation is.
A critical take-home note is a correlation these currency pair EUR/USD has with other currency pairs. The perfect positive relationship the currency pair has is with GBPUSD because the pairs share the US dollar. However, as a trader, you should trade carefully and remember to always be up to date by doing the necessary analysis.