EURUSD Chart

EURUSD is the most traded currency pair in the world. It represents the exchange rate between the euro and the US dollar. Because it brings together the two largest economies — the Eurozone and the United States — this pair offers high liquidity, tight spreads, and constant market activity. That’s why it attracts everyone from beginners to professional traders.

If you’re new to forex or looking for a reliable pair to trade, EURUSD is a great place to start. Let’s break it down in simple terms.

What Is EURUSD?

EURUSD shows how many US dollars (USD) it takes to buy one euro (EUR). For example, if EURUSD is trading at 1.10, it means one euro equals 1.10 dollars.

In this pair:

• EUR is the base currency
• USD is the quote currency

If you think the euro will rise against the dollar, you go long. If you expect the euro to fall, you go short.

This is the most liquid pair in forex. There’s always someone buying or selling it, which means faster execution and lower costs for you.

Why Trade EURUSD?

EURUSD is a favorite for many reasons.

1. High liquidity
You can enter and exit trades quickly. Orders get filled fast, even with large volume.

2. Tight spreads
Because the market is so active, the difference between buying and selling prices is usually very small. That means lower fees.

3. Easy access to news and data
Since the US and Eurozone release regular economic updates, traders have no shortage of market-moving events to analyze.

4. Good for all strategies
Day traders love the pair for its volatility during key hours. Swing traders can follow broader economic trends. Scalpers benefit from rapid price ticks and low costs.

What Affects EURUSD Prices?

To trade this pair successfully, you need to understand what moves the price. Here are the main drivers:

Central bank decisions
The European Central Bank (ECB) and the US Federal Reserve (Fed) both impact EURUSD. If the Fed raises interest rates, the dollar usually gains, pushing EURUSD lower. If the ECB signals stronger eurozone growth, the euro can strengthen, sending the pair higher.

Economic data
Reports like inflation, employment, GDP, and consumer confidence all influence the price. Strong US jobs data might support the dollar. High inflation in the Eurozone could hurt the euro.

Politics and global news
Geopolitical tensions, elections, or major policy changes often affect the markets. For example, a surprise US election result can cause the dollar to drop. Trade deals or energy supply shocks can also shift EURUSD.

Stay on top of economic calendars and breaking news. This pair responds quickly to fresh information.

Long or Short: How to Trade EURUSD

Forex trading is about predicting whether a currency will go up or down. With EURUSD, you have two main choices.

Going long (buying EURUSD)
You expect the euro to strengthen. This might happen if the US economy slows down, or the ECB adopts a more aggressive policy stance.

Going short (selling EURUSD)
You expect the euro to weaken, or the dollar to strengthen. Maybe the Fed raises rates, or US economic data beats forecasts.

Both options give you flexibility. You can profit in rising or falling markets — as long as you guess the direction right.

When to Trade EURUSD

The best time to trade EURUSD is during the overlap of the London and New York sessions, between 8:00 AM and 12:00 PM EST.

This is when:

• Market liquidity peaks
• Spreads are narrow
• News events often hit the wires

Outside these hours, activity slows down. During the Asian session, for example, EURUSD tends to move less and spreads may widen.

For day traders and scalpers, trading during the London–New York overlap offers the best opportunities. If you’re focused on bigger trends, you can take a broader view and base your trades around major data releases.

Advantages and Disadvantages