EURO Trading: Gateway To World-Embracing Success

The most liquid forex pair globally, the EUR/USD, or the Euro and US dollar, is characterised by trademark tight spreads and broad price movement feeds a continual flow of profitable opportunities. Several surefire trading strategies trade the EU/USD pair with resounding success. You can reduce/ increase position size to control risk exposure., all traders, regardless of their level of experience, may deploy these strategies for optimum euro trading.

Buying/selling the pullback

The EUR/USD forex pair naturally propels itself in two directions. First, the attendant trend that encapsulates this behaviour goes with the price from one level to the next in a positive feedback loop. Second, the momentum thus generated dissipates when the supply/demand equation changes track.

The pullback strategy benefits from the forex pair reversal, marking down significant support and resistance levels that would terminate the price swing, thereby starting the first trend direction again. You may locate these levels at preceding high and lows , apart from moving averages, Fibonacci retracement determined levels and the first thrust's starting point.

Buying/selling the breakdown

Sharply determined trading ranges, destined to generate sooner or later new trends, higher or lower, are set up by the forex pair continually moving back and forth inside limits for inordinate lengths of time. These phases are so long that you have to be patient to wait these out. As the consolidation phases over, traders can benefit from low-risk trade entries simultaneous with support and resistance breaking, resulting in a rally/selloff.

You have to time your next move carefully and with precision in order to be able to benefit from the strategy. Entering the trade too early or too late would be inimical to the best interests of the trader. The first instance would involve the range holding and a reversal being triggered. The second instance would involve too far above new support or too well below new resistance. You may diminish timing risk by opening a partial position following the pair breaking down.

Narrow range patterns entered

The pair will now and again rise or fall into a deep barrier, then hibernate. Then, there will be a lowering of volatility and attendant apathy. A breakout/breakdown is best precipitated just during such a scenario. It is within the narrow range pattern that the strategy enters the position. In the event of a major reversal, there's a tight stop firmly in place. We thus get an NR7 bar, thus easy with the forecast that, in the breakout/breakdown that's imminent, the prie parts will expand. What's more, since the stop loss can be set cheek-by-jowl next to the entry price, it qualifies as a low-risk entry.

How do you read the Euro to the Dollar?

The amount in US Dollars that equals 1 euro is read as the euro to dollar exchange rate. The exchange rate between the two currencies is quoted per this convention.

EUR/USD exchange rate – examples:

We will take a look at how we arrive at the exchange rate.

First example

Given that the EUR/USD exchange rate is 1.25, and an investor has 364 euros, how many US Dollars would they get if it was exchanged at the current rate?

364EUR X 1.25= $ 455

Second example

Given that the EUR/USD rate is 1.42 and an investor has $267, how many euros will they get if the exchange took place at the current rate?

$267/1.42= 188.03 EUR.

Third example

When an investor exchanges $796 into EUR 610, what would the ongoing euro to dollar exchange rate be?

$796/EUR 610=1.30 EUR/USD.

Determinants affecting the EUR/USD exchange rate

Factors affecting the euro side of euro to dollar:

• Eurozone members;
• European Central Bank monetary policy;
• Employment rates, job creation;
• Eurozone national debt levels and budget deficits;
• International politics and domestic politics;
• Eurozone growth.

Factors affecting the dollar side of euro to dollar:

• GDP rates as obtained in the US
• Fed set interest rates;
• Fed set money supply;
• Unemployment rates;
• Duties, tariffs and trade agreements;
• Annual budget deficits and total US national debt;
• Consumer savings;
• Social security.

Conclusion

Recurring price action is beneficial to traders novice and mature alike. Handling risk exposure and precisely timed and deftly executed fast trades stand you in good stead if you wish to deploy any of the measures detailed above to trade the EU/USD pair with resounding success.