EURUSD: The World’s Most Liquid Currency Pair

Since its beginning, when the Euro was introduced as an accounting currency on January 1st, 1999, the common currency has grown to be the second largest reserve currency on the planet, after the U.S. Dollar.

The online forex news covers the movement of the EURUSD rate on a constant basis because the currency pair makes up the most liquid and heavily traded currency pair in the world.

The Euro has been actively traded since January 1st, 2002 when coins and bills were issued to replace the original 14 currencies which made up the former European Currency Units or ECUs.

Since then, six other currencies have joined the original 14 with the Estonian Kroon the latest currency to be replaced with the Euro.

EURUSD Trading

USD forex news generally contains detailed information about trading the currency pair with many news agencies offering both a Euro currency forecast and a USD Euro forecast.

Spreads in the EURUSD currency pair is generally one pip, and sometimes among dealers and for large transactions can be less than one pip. Nevertheless, depending on economic releases and world events in the realtime forex news, spreads can widen considerably if the volatility of the currency pair increases.

Making a Euro Currency Forecast

Generally, research on the Euro focuses mainly on the exchange rate against the U.S. Dollar, since the forex USD rate is the most actively traded and hence important. Nevertheless, the Euro is also actively traded against the British Pound or GBP, the Japanese Yen or JPY and the Swiss Franc or CHF.

A typical Euro currency forecast will often include the ECB or European Central Bank’s monetary policy and interest rate outlook, historical price action in the EURUSD exchange rate and any pertinent news that might affect the Euro.

USD Euro Forecast

Many websites which offer online forex news, will also contain a USD Euro forecast. This forecast will highlight the U.S. Federal Reserve’s interest rate policy, as well as the ECB’s interest rate policy.

In addition, the USD forex news will also highlight major economic and political events which might possibly influence the value of the Greenback against the Euro, as well as other major currencies like the Australian Dollar or AUD/USD.

The EURUSD currency pair offers both beginning and seasoned traders ample opportunities to make profitable trades. With the depth of the market and the constant coverage of the rate on the online forex news, EURUSD can be the most accessible and viable currency pair, especially for new forex traders.

Trading in EURUSD is perfect for forex day traders, range traders and especially scalpers and short term traders that can take advantage of the narrow bid/offer spreads.

Other currency pairs may also provide traders with opportunities for profitable trades, such as AUD/USD, however the exchange rate AUD USD often has much wider bid/offer spreads and often trades with a considerably more volatility.

While the Euro generally trades in long sweeping moves, recent events have added volatility to the EURUSD exchange rate. Sovereign debt concerns in addition to the bailouts of Greece and Ireland have made trading the EURUSD rate much more interesting and profitable — if the trader is on the right side of the move. Nevertheless, EURUSD continues being the most traded and liquid currency pair in the forex market.

Determining and Trading the Trend in the Forex Market

One of the most important elements for a forex trader to implement involves knowing when to enter the market and initiate trades. Although it may seem just as important to know when to get out of a trade, entering a trade makes up a large component of any forex trader’s success.

Indications for Direction and When to Enter the Market

Many traders rely on the USD forex news for indications on the direction of other currencies versus the dollar. Nevertheless, a Euro currency forecast against other major currencies gives experienced forex traders indications on other important cross rates.

In addition to employing the USD forex news and online forex news, an additional resource used by many traders to determine direction in the forex market is the realtime forex news, which covers forex news as it happens.

Many successful forex traders admit that they rarely get in at the top or bottom of major moves, but, instead get in on the move once the direction has been confirmed. Often, more than one indicator and in many cases a combination of indicators is used to determine the direction of a currency pair such as AUD/USD, for example.

A forex professional will often have the patience to wait and get in on a major move once they are confident that the pre determined conditions they are watching are met. This avoids the trader initiating trades on false signals.

The key is being aware of what signals to watch and then initiating trades promptly once these trading conditions are met. As an example, The Australian Dollar often moves in sympathy with the price of gold.

Once the trader becomes aware of a major move in the price of gold, the exchange rate AUD USD is highly likely to also make a similar move.

Identifying the Trend

A trading maxim often repeated among professional forex traders is “the trend is your friend”. This summarizes how trend traders approach trading and offers insight into what to look for when initiating trading positions.

A tried and true method for determining a forex trend consist of studying historical price charts of the currency pair’s exchange rate over a period of time. Technical data and its analysis has often been the first line of approach for many traders when discerning the market’s overall trend.

Trends also occur during different time frames: long term, medium term and short term.

Trading with the Trend

After an accurate determination of the direction of the trend, a professional trader can use the online forex news to get in on a trade using an item in the news for an optimum entry point. Using stops at key points which indicate a price reversal in the price chart will protect the trader’s profits

Once the trader has discerned the major trend, they can trade the trend in the medium and short term depending on what type of strategy they intend to implement. Many traders keep a watchful eye on the realtime forex news to catch key trend reversal points made after the release of major economic data.

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Bullish and Bearish Indicators for Trading Forex

 Fundamental and Technical Indicators

Generally, seasoned traders cannot rely solely on the fundamental online forex news to determine entry and exit points for forex trading positions, but use a combination of technical indicators for optimum buying and selling opportunities in trading.

In many cases, more than one indicator is used, — whether fundamental or technical — with another indicator or group of indicators confirming each other to ensure the likelihood of a profitable trade.

Bullish Indicators

As an example, a Euro currency forecast or a USD Euro forecast might include the following technical indicators to provide the trader with optimum trading opportunities on the upside:

• Upside breakout of trend lines – Often, a trend line with a downward slant showing declining highs, which breaks out to the upside breaking through key resistance, indicates a good possibility of a trend reversal with a continuing bullish move.

• Divergences in the RSI and MACD – The Relative Strength Index or RSI and the Moving Average Convergence Divergence or MACD indicator make up two key technical indicators which signal a change to the upside in the overall trend when showing regular divergences versus the price after a period of overall downward price action. On the other hand, bullish hidden divergence indicates that a continuation of an upwards trend may soon resume.

• Strong nearby levels of support in the price chart – if the price chart shows a long sideways trend with strong levels of buying at certain prices, especially when near to the current price level, these indicate a likely move to the upside.


Individually interpreted, these indicators could give false positive results. Nevertheless, when taken in combination, they often provide a more solid basis for establishing a long position.

Bearish Indicators

Bearish indicators mirror bullish indicators and will often also be included in a USD Euro forecast or in a Euro currency forecast. Technical indicators generally negate fundamental events in the online forex news, with the trading maxim “price discounts all”.

• Trend lines which break out to the downside – generally, when a trend line begins to slope downwards and breaks key support levels, gives an indication that the bearish move will continue.

• Bearish divergences in the RSI and MACD – The Relative Strength Index or RSI and the Moving Average Convergence Divergence or MACD indicator make up two key technical indicators which signal a change to the downside in the overall trend when showing regular divergences versus the price after a period of steady upside movement. On the other hand, bearish hidden divergence indicates that a continuation of a downwards trend may soon resume.

• Strong nearby levels of resistance in the price chart – if the price chart shows a long sideways trend with strong levels of selling at certain prices, especially when near the current price level, these indicate a likely move to the downside.

As with the bullish indicators, when individually interpreted the bearish indicators could give false positive results and are much more effective when interpreted in combination. Although technical indicators do not rely on the online forex news, many traders use the realtime forex news to initiate and exit positions. Visit here: http://forexnewsnow.com/

While keeping an eye on realtime forex news may provide traders with insight to short term exchange rate moves, technical traders rely on other key indicators to establish long and short positions in the forex market.