EUR/USD News and Analysis

Euro

EUR/USD Meeting Overhead Resistance

Euro

EUR/USD Rally Stalls At Major Resistance Confluence

An attempt to extend higher in EUR/USD appears to be short-lived as major overhead resistance has come into play.The currency pair had corrected lower...
Euro

EUR/USD Extends Gains, Trades At Six-Week High

EUR/USD broke above resistance for a bullish continuation during European trading on Tuesday and trades at the highest level since February 2nd.The pair broke...
Euro Dollar EUR/USD

EUR/USD Reverses From Declining Trendline To Erase Early Day Gains

After a steady rally in early Asian trading, EUR/USD turned lower from trendline resistance at the European open to erase gains.The pair faces strong...
Euro

EUR/USD Weekly Forecast March 20-24

EUR/USD traded in a volatile manner over the past week as a 100 point drop in the early week was followed by a rally...

Live EUR/USD Chart

EUR/USD is the most popular currency pair in the forex market and offers the best spreads. The reason behind it is because the US Dollar is the most actively traded currency, while traded volume on the Euro is less than half of the US Dollar, the Euro falls second on the list of most actively traded currencies.

Nicknames

The Euro is often referred to as the “fiber”; the nickname derives from the usage of fiber in the paper that the euro is printed on. The EUR/USD pair is often referred to as simply “the Euro”, or “Euro Dollar”.

Correlations

The Euro often carries an inverse correlation with the US Dollar, as the two currencies are the most popular and traded against each other. There is also a strong correlation with the Euro and British Pound, because of similarities in their economy, as well as the UK’s former membership of the European Union. After ‘Brexit’ the correlation may not be as strong.

The Swiss Franc also carries a strong correlation with the Euro, as the Swiss National Bank had committed in the past to maintaining a ‘peg’. Essentially the central bank would buy and sell in large quantities to manipulate supply and demand, in order to keep their currency as close to the Euro as possible. This plan failed in January 2015 and caused a sharp appreciation in the Swiss Franc. Correlations have not been as strong since then, but a general correlation remains between the two currencies.

What Factors Affect EUR/USD Rate?

The biggest factor in the evaluation of a currency is the interest rate differential. Generally, a higher interest rate will cause a currency to go up, and a lower interest rate will cause a decline. Often central banks will alter their interest rates with the intention of changing the value of their currency.

In 2014, the European Central Bank (ECB) cut their interest rates to drive the value of the Euro lower. A lower currency can help increase exports, as well as inflation. The central bank, in most cases, communicates their intentions prior to taking action. Communication from the ECB as well as a description of their target mandate can be found at www.ecb.europa.eu/. In the United States the Federal Reserve, often referred to as ‘the Fed’ controls the interest rates. Their target mandate, as well as press releases, can be found at www.federalreserve.gov/

When Does EUR/USD Experience Volatility?

The highest volatility in the overall foreign exchange market occurs during the overlap between the European and North American sessions. This is especially true for the EUR/USD as the most important economic releases tend to occur during the overlap.

The ECB tends to schedule their communication near the start of the North American session, and US data tends to be released ahead of the European close. There are European economic releases ahead of the North American open, but they do not tend to impact the overall trend as much, and in most cases only create fluctuations in the exchange rate.

The Federal Reserve schedules some of their releases after the European close, and on those days volatility is seen later in the day.

During the Asian session, there are minimal news flows that impact the pair, and the exchange rate will often retrace on lower volume. The session is known to create ranges, a directional move during the time would be rare.

Who Trades the EUR/USD?

Aside from regular market participants, the EUR/USD has gained popularity among scalpers and algorithmically driven trading programs. The appeal to the currency pair has been the low spread, allowing traders to trade in and out of the pair without having a substantial impact on their commission costs.

Because of the higher amount of technical traders driving volume, the pair is known to respect technical indicators more often than the rest of the majors.

1,792FansLike
9,753FollowersFollow
1,163FollowersFollow

Live Forex Rates

FX PairsBidAsk
Live FOREX Rates by FXCM

Upcoming Economic Events

Other News

oil pipeline

Crude Oil Prices Rebound From Support, Selling Interest Persists

Oil prices were able to recover from support levels on Wednesday with a significant move higher later in the US session, but there was...
silver

Silver Prices Range-Bound as Dollar Stabilizes

Silver prices rose slightly on Thursday, although gains were limited as the U.S. dollar stabilized and demand for riskier assets improved.May silver futures edged...
Euro

ECB Allocates EUR233.5bn In Final TLTRO, Strong Demand For Cheap Funds

The ECB allocated EUR233.5bn in the latest Targeted longer-term refinancing operation (TLTRO) compared with a figure of EUR62.2bn previously. The demand for funds was...
Bank of England

Bank of England’s Broadbent: Quite Possible UK Interest Rates Could Go Up

In a speech on Thursday Bank of England Monetary Policy Committee (MPC) member Broadbent stated that it was quite possible that interest rates could...
UK

February UK Retail Sales Rise 1.4%, Price Increases Accelerate

UK retail sales volumes rose 1.4% in February compared with expectations of a 0.4% on the month. Although the January data was revised to...