Is EUR/USD a Good Choice?

If you’re looking to get into forex trading, the EUR/USD pair is a popular pair. A EUR/USD trading strategy would consist of buying and selling the Euro against the Dollar in the forex market in order to potentially profit from the price changes.

» Need more help? See our forex day trading strategies

EUR/USD: Considerations

1. Liquidity and Accessibility

Being a major currency pair, EUR/USD is very accessible. This also ensures high liquidity and tight spreads, meaning you can easily enter and exit positions.

» Understand the difference between major and minor currency pairs

2. Market Information and Analysis

The EUR/USD exchange rate is less likely to move a lot because of sudden market fluctuations, making it a stable and reliable currency pair.

» Learn more about cross-currency pairs

3. Volatility and Risk

Volatile currencies tend to have low liquidity, which isn’t the case for this currency pair. The EUR/USD has deep liquidity and, therefore, presents a lower potential risk than emerging market currency pairs. However, it still maintains some volatility to provide for trading.

4. Correlation With Global Events

Certain events will impact the value of the two currencies and, thus, the trading pair. These include the European Central Bank and the U.S. Federal Reserve’s policy announcements, economic data releases, and geopolitical events.

» Struggling to keep up with geopolitical events? Consider using an economic calendar

Is EUR/USD the Right Choice?

The EUR/USD currency pair is a popular choice for forex traders due to its high liquidity and significance in the economic market. The level of volatility it experiences also provides enough for trading and forex traders while remaining a relatively stable option compared to other currency pairs.

However, it's crucial to remember that nothing is guaranteed in the forex markets, and trading presents significant risks.

» Don't like the option? Take a look at some other popular forex majors