Euro to US Dollar
- By date
- Metadoro first
Just about a week ago, I assumed that the path of the single currency beyond 1.0700-1.0950 range against the Greenback was an unlikely scenario, while range trading strategies would be preferable soon after a period of short selling activity in EUR/USD. In the light of newly discovered circumstances, I have to revise my previous opinion.
Still elevated U.S. Treasury yields, combined with weaker-than-expected service segment data from Europe vs strong similar indications from the United States, are making the U.S. Dollar more attractive for investors, while the safe haven role of the U.S. bonds may be increasingly popular as well due to the decline on Wall Street. The decline of Apple stocks prices led the S&P 500 index to lower levels. Capital outflows from the Euro to the Dollar could be extended to zipping further down below the 1.07 technical support.
Such a move may continue in the new week. And it this seems to be a basic scenario, whereas further steps would depend on the development in the fundamental environment, including some long-awaited inflationary reports and corporate news.
Euro to US Dollar
- The pair has the highest liquidity in the market and a vast number of trads are made with the pair. So, its movements largely indicates the behavior of the currency market in general. The pair is the easiest for technical analysis as it mostly follows the rules of it;
- The pair is likely the first one that every novice will meet during his/her first days in trading;
- Brokers usually have the lowest or zero trading fees on the pair. Brokers sometime give positive swaps on the pair, so a trader may make some money while keeping it for the longer term, and getting the profit on positive swap;
- The U.S. Dollar, or Greenback, is the leading currency in this pair, so it has the most influence on its movements. So, factors affecting the U.S. Dollar should be especially highlighted during technical and fundamental analysis of the pair;
- The EUR/USD is largely driven by two major economies and actions of the two largest central banks – The Federal Reserve (Fed) and European Central Bank (ECB). So, a trader should be focusing on macroeconomic data for both economies, including GDP, Consumer Price index (CPI), labour market indications, and statements of the central bank officials with a focus on the top officials of the Fed and ECB;
- U.S. 10-year Treasuries yields to German 10-year Bund ration is an indication of the strength of either currency. The higher the value, the stronger the Dollar;
- EUR/USD has a strong correlation with other European currencies, like the British Pound to the U.S. Dollar (GBP/USD) or the U.S. Dollar to the Swiss Franc (USD/CHF), and with cross rates of the Euro to other currencies. The pair has a strong exposure to USD/JPY, USD/CAD, and some other currency pairs.
|Contract value||100000 EUR|
|Date||Short Swap (pips)||Long Swap (pips)||No data|
|Minimum transaction volume||0.01 lot|
|Maximum transaction volume||70 lots|
|USD Exposure||Max Leverage Applied||Floating Margin|