The chart is one of the most important tools for traders. It provides them with live rates and offers tracking and insights of the market. Use this free chart to analyze the past behavior of Euro Dollar currency pair. This will help you with your EUR USD forecast and trading. You can also use it for other currency pairs.
The last few weeks have been highlighted by a number of geopolitical events. That has been putting some pressure on the USD. By late last week, it appears that those fears have been alleviated. Now the focus turns to the ECB as they are set to release their next interest rate decision this week. However, ECB President Mario Draghi might throw cold water on any chance of a reduction in bond purchases.
EURUSD is one of the most popular assets in the financial markets today. Many traders choose to invest in instruments based on this currency pair. Why is it so popular? Here are some interesting reasons:
The Largest Currency Pair
The Euro Dollar currency pair trades in the huge, highly liquid forex market. This market is the largest financial market in the world, and boasts an average daily turnover estimated at around $4 billion per day. Due to the growing availability of online forex brokers, retail traders can now participate in this exciting market in amounts suitable to their budgets.
EURUSD enjoys a top position in the forex market as the most heavily traded pair, accounting for almost 30% of spot trades executed in the market each day. While the U.S. Dollar is involved in 90% of currency trades on a daily basis, the Euro is involved in roughly 40% of daily currency trading volume. Other Major pairs include USD/JPY, GBP/USD, USD/CHF, EUR/GBP and GBP/CAD.
The pair also shows sufficient volatility to allow a trader to profit from swings. A variety of fundamental economic factors affect the pair exchange rate, so it seems like something is happening in this currency pair market just about every weekday.
Spreads and Products
As a result of this active trading environment and a large number of market participants willing to quote prices, traders can benefit from competitive pricing environment, as banks, brokers and other financial institutions compete with each other for customer business.
The main effect of this competition among forex market makers is that dealing spreads in this pair are very tight, usually just a couple of pips wide in relatively calm market conditions.
Another useful aspect of the competition is that a wide variety of trading instruments is available to fine tune the type of exposure a trader wishes to take. Besides the most commonly used spot trades, traders can also deal currency futures, forwards, swaps, contracts for difference (CFDs), currency exchange traded funds (ETFs), Binary Options and a wide variety of both vanilla and exotic options types.
Leverage is Higher
Forex can offer clients the ability to deal liquid forex pairs like EURUSD using very high leverage ratios in their margin accounts — up to 500:1 in some cases. Of course, using high leverage can magnify losses, as well as gains, but it does provide ample opportunity for EUR USD traders to speculate on exchange rate movements.
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