Trading EUR/USD
The EUR/USD represents the world’s two largest economies and is the most traded currency pair. But while rich volatility and volume attract traders worldwide, generating substantial profits is no straightforward feat. This guide will break down the history of the EUR/USD, plus how to trade it in 2023, including online charts, signals, strategies, news and more. We also list the best brokers for trading EUR/USD.
EUR/USD Trading Brokers
#1 - Forex.com
Forex.com is a leading FX broker. The brand offers a wide range of currency pairs and some of the lowest fees in the industry. Spreads on the EUR/USD come in as low as 0.0 with a $7 commission per $100k.
"Forex.com is an excellent broker for forex traders with over 80 currency pairs, tight spreads, low commissions and powerful platforms. The brand is also heavily regulated while its parent company is listed on the NASDAQ, giving it a high trust score."
- DayTrading Review Team
- GBPUSD Spread: 1.0
- EURUSD Spread: 1.0
- EURGBP Spread: 1.0
- Total Assets: 80+
- Leverage: 1:50
- Platforms: MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
Stocks Trading
Forex.com offers access to thousands of US, EU and UK stocks, with spreads of just 1 point. Speculate on household names as well as new IPOs. US stocks are available from just 1.8 cents per share.
About Forex.com
Forex.com boasts a global reputation with multiple awards and 20+ years experience. Regulated in the US, EU, UK and Canada they provide a huge range of markets, not just forex, and offer competitive fees on a cutting-edge platform. The brand also provides a suite of additional tools, from performance analytics and SMART Signals to advanced charts and strategy builders.
Pros
- Beginner-friendly web platform and mobile app
- Fast execution speed of less than 1 second
- Respected and trusted broker overseen by tier-one regulators including the US SEC
Cons
- $15 monthly inactivity fee
- Investment offering varies between countries
- No copy trading platform
#2 - NinjaTrader
NinjaTrader supports the trading of popular currencies including the EUR/USD. The trading software also offers unique features tailored to forex trading, including specific order and market windows.
"We recommend NinjaTrader for high-volume futures traders looking for low fees and premium analysis tools."
- DayTrading Review Team
- GBPUSD Spread: 1.6
- EURUSD Spread: 1.3
- EURGBP Spread: 1.6
- Total Assets: 50+
- Leverage: 1:50
- Platforms: eSignal
Stocks Trading
Stocks can be traded by connecting the NinjaTrader platform to supporting brokers. You can then take positions on large public companies and household names via advanced trading software.
Crypto Trading
Trade micro Bitcoin futures with low fees and leading charting tools. Get exposure to Bitcoin through CME Group's centralized exchange with robust risk management tools.
About NinjaTrader
NinjaTrader is a US-headquartered and regulated brokerage that specializes in futures trading. There are three pricing plans to suit different needs and budgets, as well as ultra-low margins on popular contracts. The brand's award-winning charting software and trading platform also offers a high-degree of customization and superb technical analysis features.
Pros
- Easy account opening that takes a few minutes
- Free platform access and trade simulation capabilities
- Industry-leading futures broker with multiple awards
Cons
- Premium platform tools come with an extra charge
- Non forex and futures trading requires signing up with partner brokers
- Withdrawal fee on some funding methods
#3 - OANDA US
OANDA offers 68 forex pairs, more than many alternatives. The broker's in-house platform also offers impressive execution speeds and a suite of advanced charting and analysis tools.
"We recommend OANDA for US traders seeking a user-friendly platform with premium market research and a straightforward joining process. OANDA is a particularly good pick if you want a heavily regulated broker with a secure trading environment."
- DayTrading Review Team
- GBPUSD Spread: 3.4
- EURUSD Spread: 1.6
- EURGBP Spread: 1.7
- Total Assets: 65+
- Leverage: 1:50
- Platforms: MT4, TradingView, AutoChartist
Crypto Trading
Speculate on the world's biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Clients can spot trade cryptocurrencies on Paxos's itBit exchange through the OANDA platform via OANDA’s partnership with Paxos. Users can trade digital currencies in a few taps through the iOS and Android mobile app.
About OANDA US
OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available, alongside flexible contract sizes and automated trade executions.
Pros
- Feature-rich app with 50 indicators, 11 drawing tools and 9 charting styles
- Low minimum deposit for beginners
- The OANDA web platform offers advanced price charts and graphs
Cons
- Customer support not available on the weekend
#4 - Webull
Webull offers a modest collection of 17 currencies, including majors like EUR/USD. Forex can be traded on the feature-rich investing app with real-time quotes and low spreads.
"Webull is best for traders looking to buy and sell stocks on a user-friendly app with zero commissions."
- DayTrading Review Team
- GBPUSD Spread: 0.4
- EURUSD Spread: 0.2
- EURGBP Spread: 0.4
- Total Assets: 15+
- Leverage: 1:4
- Platforms: Own
Stocks Trading
Webull offers a fantastic list of 2000+ US stocks, fractional shares, options, ETFs, OTC, and ADRs. There is no commission on stocks, ETFs, and options. Full extended trading hours is available while custom screeners and watchlists aid the decision making process.
Crypto Trading
Webull offers trading on popular cryptos like Bitcoin against the US Dollar. With 35+ tokens and premium analysis tools, traders can review market trends and identify opportunities in a few taps.
About Webull
Webull is a US-regulated trading app that offers stocks, options, forex, cryptos, ETFs, fractional shares and more. The firm is authorized by the SEC and FINRA with a strong trust rating. Low fees, no minimum investment and generous bonuses have made the discount broker popular with online investors.
Pros
- Smart Advisor for auto investing
- Brokerage account plus IRA
- Respected brand with strong regulatory oversight
Cons
- High deposit and withdrawal wire fees for non-US residents
- Sometimes sudden changes in trading conditions
- Day trading is limited for customers with less than $25,000 deposited
#5 - IG Group
IG offers currency trading on its award-winning web platform and mobile app. Comprehensive charts and forex analysis tools are also available through ProRealTime.
"IG offers a superb all-round package. Beginners will appreciate the user-friendly web platform and secure trading environment while established investors will rate the 17,000+ markets and top-tier market research."
- DayTrading Review Team
- GBPUSD Spread: 0.9
- EURUSD Spread: 0.8
- EURGBP Spread: 0.9
- Total Assets: 80+
- Leverage: 1:30 (Retail), 1:250 (Pro)
- Platforms: MT4, AutoChartist, TradingCentral
CFD Trading
IG offers an impressive suite of 17,000+ CFD instruments. Negative balance protection ensures accounts cannot drop below zero while custom price alerts and the IG Academy enhance the trading experience.
Stocks Trading
IG offers 13,000+ shares, with more listed firms than most competitors. Fees are low with no commission on US stocks. Extended hours trading is also available alongside ultra-fast execution speeds of 0.014 seconds.
Crypto Trading
11 popular cryptos are available, plus two crypto crosses. A crypto index is also offered, following the value of the top 10 digital currencies by market cap. All cryptos are available via CFDs.
About IG Group
IG is an award-winning broker that has an excellent reputation globally. The brand-US offers spread betting, CFD and forex trading across a comprehensive suite of markets. IG is also multi-regulated, provides a great trading app and has 50 years experience.
Pros
- IG is an LSE-listed company with a transparent financial history and a great track record
- Over 17,000 assets are available spanning stocks, forex, commodities, baskets, futures, options and more
- IG offers great educational materials including an extensive library of training and support on how to day trade successfully
Cons
- No copy trading platform
- Inactivity charge
#6 - Videforex
Trade 35 major, minor and exotic forex pairs through CFDs with floating spreads from 0.1 pips. Alternatively, binary options allow you to speculate on rising and falling prices with a fixed stake and payout.
"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts are also higher than most alternatives climbing to 98%."
- DayTrading Review Team
- GBPUSD Spread: Floating from 0.1 pips
- EURUSD Spread: Floating from 0.1 pips
- EURGBP Spread: Floating from 0.1 pips
- Total Assets: 35
- Leverage: 1:500
- Platforms: TradingView
CFD Trading
Videforex CFDs are available on forex, indices, cryptocurrencies and commodities with up to 1:500 leverage and tight spreads from near zero. CFDs incur a commission fee of 1%–2.5% and up to 5% for leveraged trades.
Stocks Trading
Trade binary options and CFDs on global stocks from US, European, Russian and Asian exchanges, as well as 37 indices covering a wide range of global markets. The access to stocks trumps many binary options brokers.
Crypto Trading
Traders can speculate on crypto prices in pairs with USD and CNY through binary options and CFDs. The range of digital currencies is fairly narrow vs alternatives but major tokens like Bitcoin are available.
About Videforex
Videforex offers access to stock, index, crypto, forex and commodities markets via binary options and CFDs. The proprietary platform, mobile app and integrated copy trading are user-friendly and will suit new and casual traders, and the market analysis tools and trading contests provide good ways to improve your trading skills.
Pros
- You can trade every day and through the weekends
- Videforex offers transfers via a wide range of payment types, from credit cards to cryptocurrencies
- Mirror the trades of experienced investors with low fees
Cons
- US clients aren’t accepted due to legal restrictions
- The broker isn’t overseen by a trusted regulatory agency
- No MetaTrader 4 integration
#7 - Pocket Option
Binary and OTC options can be purchased on over 40 foreign exchange pairs. Typical payouts are also decent at 81% and users can trade forex binary options in just a couple of clicks.
"We recommend Pocket Option for aspiring binary options traders looking for copy trading services and a low minimum investment."
- DayTrading Review Team
- GBPUSD Spread: N/A
- EURUSD Spread: N/A
- EURGBP Spread: N/A
- Total Assets: 50+
- Platforms: MT5
Stocks Trading
Trade 30 of the most popular American multinational stocks including Microsoft and Google. Payouts on big brands come in at a decent 92% while indices are available up to 67%.
Crypto Trading
Pocket Option supports major cryptocurrencies on a beginner-friendly app. Over 10 leading cryptocurrencies are available with very high leverage up to 1:1000.
About Pocket Option
Founded in 2017, Pocket Option is a binary options broker offering up/down contracts on forex, stocks and cryptocurrencies. With over 100,000 active users and a global reach, the brand has proven popular with budding traders. Pocket Option also supports dozens of payment methods and has a low minimum trade of just $1.
Pros
- Live signals
- 50+ payment methods
- 92% payouts on binaries
Cons
- The expiration time is limited on trades
- Only one account type is available
- No MT4 trading platform
#8 - Just2Trade
Traders can access a decent range of 60+ major, minor and exotic forex pairs through standard and ECN accounts with tight spreads from 0.5 and 0.0, respectively. Execution speeds are also faster than most competitors at 50ms, which will appeal to active forex day traders.
"Traders seeking a multi-asset broker with an exceptional range of 35,000+ assets, market-leading software and low trading fees should consider Just2Trade. The Try2BFunded program will also appeal to users seeking funded trading accounts."
- DayTrading Review Team
- GBPUSD Spread: 0.0
- EURUSD Spread: 0.0
- EURGBP Spread: 0.0
- Total Assets: 50+
- Leverage: 1:20
- Platforms: MT4, MT5, TradingCentral
CFD Trading
With CFDs on 20+ Polish and 30+ US stocks, as well as energies and seven global stock indices covering US, UK, European, Australian and Japanese markets, Just2Trade offers a superb selection of global assets.
Stocks Trading
As well as Just2Trade's 50+ stock CFDs, traders can access a huge variety of thousands of stocks traded on US and international exchanges. The chance to build an investment portfolio and benefit from dividends sets Just2Trade apart from most CFD brokers.
Crypto Trading
Traders can speculate on a modest selection of the largest cryptos by market cap including Bitcoin. On the downside, crypto trading is only available to clients from Asia which is more restrictive than many alternatives.
About Just2Trade
Just2Trade is a reliable multi-regulated broker registered with FINRA, NFA and CySEC. The company has 155,000 clients from 130 countries and stands out for its huge suite of instruments and additional features, including a social network, robo advisors and a funded trader programme.
Pros
- The list of 35,000+ instruments is more than almost any other broker
- Regulated and trustworthy with authorization from FINRA, NFA & CySEC
- WhoTrades social network and copy trading through Novoadvisor
Cons
- Cryptocurrency is only available in Asia
- Research tools such as stock screeners require third-party applications
- Few standard educational resources compared to other brokers
#9 - Sage FX
Trade 7 major, 21 minor and 29 exotic forex pairs with high leverage and a choice between STP or ECN accounts. Support is available around the clock and the TradeLocker forex software is provided.
"Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker's prop trading service will also appeal to users looking for funded accounts with up to $200K available."
- DayTrading Review Team
- GBPUSD Spread: 0.9
- EURUSD Spread: 0.9
- EURGBP Spread: 2.5
- Total Assets: 57
- Leverage: 1:500
- Platforms: TradeLocker
CFD Trading
Trade CFDs on forex, stocks, metals, energies, indices, cryptos and dollar futures. Sage FX offers tight spreads and high leverage on all instruments from 1:100 to 1:500.
Stocks Trading
Speculate on price movements of 37 US and European blue chip stock CFDs, including Adidas, Intel and Volkswagen. On the negative side, the selection of stocks is limited vs alternatives and direct share dealing isn't provided.
Crypto Trading
Trade CFDs with leverage up to 1:100 on 23 crypto pairs with USD including popular tokens like Bitcoin and Ether and lesser-known options like OMG. On the downside, crypto-only pairs are not offered.
About Sage FX
SageFX is an offshore, unregulated CFD broker that offers highly leveraged trading on forex, stocks, commodities, indices and crypto via the TradeLocker platform. Traders can access commission-free trading or an ECN account with tight spreads. While the broker's regulatory status is weak, it does provide segregated accounts and two-factor authentication.
Pros
- Ability to deposit and withdraw via Bitcoin
- High leverage up to 1:500
- Fast withdrawal processing
Cons
- Relatively narrow range of asset classes
- Not regulated by any reputable body
- Lacks educational resources and other extra features
#10 - ForexChief
ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs on the leading MT4 and MT5 platforms. Spreads are tight starting from zero and there are no dealers or requotes.
"ForexChief will prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The large welcome bonus and low starting deposit will also appeal to new traders."
- DayTrading Review Team
- GBPUSD Spread: 0.9
- EURUSD Spread: 0.4
- EURGBP Spread: 0.9
- Total Assets: 40
- Leverage: 1:1000
- Platforms: MT4, MT5
CFD Trading
ForexChief offers a competitive range of CFDs, encompassing crypto, indices, energies and metals. A clear pricing schedule is available to clients with no hidden charges. Traders can also access very high leverage up to 1:1000.
Stocks Trading
ForexChief offers 100 US company stocks CFDs for MT4 DirectFX and Classic+ account holders. Investors can speculate on the price of some of the world's largest companies, including Apple and Coca Cola. Spreads start from 5.
Crypto Trading
ForexChief supports crypto trading with five major digital currencies paired against the US dollar. Traders can bet on rising and falling prices with leveraged CFDs and market-leading trading software.
About ForexChief
ForexChief is a foreign exchange and CFD broker, established in 2014. The company is based offshore and registered with the VFSC and FMA. Users can choose between a wide selection of accounts and base currencies, making ForexChief accessible to global traders. The brand also stands out for its no deposit bonus and fee rebates for high-volume traders.
Pros
- Turnover rebates for active traders
- High leverage up to 1:1000 is available
- A welcome deposit bonus is offered to new users
Cons
- Withdrawal fees on several payment methods
- Limited market research
- Weak regulatory oversight
Why Trade EUR/USD?
As the most popular of the major forex pairs, the EUR/USD is often highlighted on trading platforms and exchanges. But why do so many traders opt to pursue profits from this pair?
- Liquidity – The EUR/USD promises consistent liquidity, plus low bid-ask spreads.
- Volatility – The huge numbers of active traders and market speculation ensure relatively high levels of volatility. All of which can lead to greater profit potential.
- Prevalence – They are the two most popular reserve currencies. Their size leads to an abundance of financial data on the pairing being released. This also makes them relatively straightforward to follow.
- Availability of resources – In some ways, short and long-term forecasts are now easier to make. You have access to historical graphs, candlestick and monthly charts, plus customizable indicators. Conducting Elliott wave analysis is more straightforward, for example. In addition, you have online active trading communities. These are often full of weekly forecasts and predictions for today.
So, with historical data downloads just a few clicks away and spreads plastered across the internet, intraday traders have plenty of access to the necessary information.
Chart
Drawbacks & Risks
Despite a number of benefits to trading the EUR/USD pair, there also certain drawbacks:
- Leverage – Trading on margin may increase your potential profit. However, it can amplify losses. So, if you do utilize leverage, making accurate daily and next-week forecasts is essential.
- Volatility – The high levels of volatility within the EUR/USD can result in winning positions swiftly turning into losing ones. Often, no amount of historical data and 20-year charts can prepare you for the speed at which prices can swing.
- Automated competition – Unfortunately, even with attractive forward and live quotes, competition is now fierce. You are investing against an increasing number of trading algorithms. With your interactive chart, you need to manually analyse and react to a bullish market. However, bots will automatically enter and exit positions once certain criteria have been met.
Influences on EUR/USD Movement
Political Events
A crucial factor is the political landscape. As seen in the Brexit referendum, instability can influence the direction of currencies. Yet it isn’t just major elections that play a part. Changes such as Switzerland’s decoupling from the euro peg hit exchange rates. Global events like the Covid-19 and the Russia-Ukraine conflict also influenced the EUR/USD because of the extensive impact on the economy.
The challenge comes in keeping an eye on the numerous countries within the eurozone. So, keep track of the latest political and economic news. If you combine recent events with EUR/USD historical data on a simple Excel or interactive chart, it will allow you to make more accurate forecasts for 2023 and beyond.
Economic Growth
Your EUR/USD live analysis makes far more sense if you have a thorough understanding of what influences price trends.
The biggest factor is the strength and outlook of the two economies. If the European economy grows faster than the US economy, the euro will strengthen against the dollar, and vice versa.
A telling gauge of economic strength is interest rates. For example, the dollar normally strengthens when US interest rates are higher than those of big players in European economies.
Monetary Policy
There is also a correlation between monetary policy implemented by the respective central bank and the EUR/USD relationship. This was seen during the Covid-19 pandemic, a crucial event in the EUR vs USD history.
There was an unusual separation between the US Federal Reserve (Fed) policy and European countries during this period. Investors preferred the region with fewer Coronavirus cases, which reflected a sign of swift economic recovery. Unsurprisingly, this all led to strange fluctuations between the EUR/USD.
Today, many that are investing focus on projections and expectations of central bank policy to help them form strategies around the EUR/USD.
Currency Correlations
While you focus your trading efforts on the EUR/USD, there are specific correlations with other currencies to be aware of. You will notice that some feature in numerous forex pairings. This is because all currencies are interlinked—none of them trade entirely independently of each other.
Their relationships are known as positive and negative correlations:
- Positive correlation – This is when currency pairs react in line with each other. The three most popular pairs, GBP/USD, AUD/USD, and EUR/USD, are all positively correlated due to the USD being the counter currency. So, any change in the US dollar will impact all the pairs.
- Negative correlation – Occurs when they react in the opposite direction. Popular pairs include USD/CHF, USD/JPY, and USD/CAD. Here, the US dollar is the base currency. This means they move in the opposite direction of the previously mentioned majors, where the US dollar plays the counter.
Application
A EUR/USD trader can use this knowledge to better understand the implications of movement in certain pairs. Let’s take the British Pound vs the US dollar, for example. When trading this pair, to an extent, you are also trading the Euro vs the British pound.
Of course, it isn’t quite that straightforward. Economic factors and market speculation can result in shifts in currency correlations. A negative correlation may turn positive and vice versa. Still, it remains a useful indicator that can inform trading decisions.
EUR/USD Trading Strategy
An effective EUR/USD strategy is more than understanding how you can use pip values and calculators to your advantage, or even getting a feel for premarket sentiment. It is about using your investing chart in realtime to consider tick data and weigh up your options.
Timing
Once you have a solid grasp of how EUR/USD market forces interact, you will need to turn your attention to a strategy. 5-minute, 30-minute, weekly, and all-time charts may prove useful, but knowing when to trade is just as important.
Part of the attraction of forex day trading is that you can buy and sell 24-hours a day. But while this is true, it doesn’t mean you should. Instead, you want to trade when the EUR/USD pair is active, with plenty of volume and volatility.
For example, when London and Europe are open for business, pairs that feature the British Pound and euro are more actively traded. If you are day trading with EUR/USD, volume charts show the most active period is when both London and New York are open. These markets are open between 08:00 and 22:00 GMT.
The danger is, if you invest at the wrong times, the cost of spreads and commissions can cancel out your profits. So, many suggest only trading within a three to four-hour window.
Ideal Window
So, when is the best time to day trade EUR/USD binary options, futures and other instruments?
The ideal time is arguably from 13:00 to 16:00 GMT. This three-hour window is when London and New York are both open. Volume from both markets means spreads are normally tightest during this window.
This is also when forex forums come alive and you will see the biggest daily moves. All of the above factors can result in the greatest profit potential. So, while it may be tempting to respond to every buy-sell signals you see today, resistance may prove sensible.
Try not to let graph and market noise pressure you into trading on 12-hour intraday forecasts. Focus on what you know and ensure volume validates any potential moves.
Buying & Selling the Breakout/Breakdown
EUR/USD live charts and technical analysis will be needed to succeed with this strategy. You will find the pair swing back and forward within boundaries for considerable periods. This creates clear trading ranges, which should lead to new trends, higher or lower.
Bide your time during the consolidation phases. The reward could be low-risk trade entries when you spot that resistance and support levels ultimately break, leading to a rally or sell-off.
This technique relies on timing. Enter your position too early, and you may find the range holds and a reversal is triggered. Go in too late, and your risk increases as the position may execute above new support or below new resistance.
Narrow Range Patterns
You will frequently see the pair climb or drop into a substantial barrier and then fall dormant, creating narrow price range bars, leading to minimal volatility. This also results in powerful entry signals for breakouts and breakdowns.
So, enter your position within the narrow range pattern, placing a tight stop to prevent losses from a major reversal.
The benefits of this method are that the straightforward pattern often predicts price bars will increase in significant breakouts and breakdowns. In addition, it’s low risk as you can place stop-losses close to the entry price.
When it comes to day trading EUR/USD, different strategies work for different people. Some prefer using pivot points, swap points, and forward curves, others will focus on trading around forex news announcements. Whether you opt for chart investing or not though, be patient, perfecting a strategy takes time.
Role of the US Dollar
The EUR/USD related index you look at today will have been shaped to some extent by the unique role the US Dollar has played over the years. These are just a few of the reasons it has grown to become the world’s most important currency:
- The quote live price of gold and other commodities is often set in US dollars.
- The Organization of Petroleum Exporting Countries (OPEC) also conducts transactions in US dollars.
- Considered the world’s reserve currency, it is used to settle the majority of international transactions.
- Many small countries will peg their currency’s value to that of the US Dollar, whilst global banks will hold a large portion of currency reserves in US Dollar.
- It is the most featured currency in popular pairs, so as an aspiring forex trader, you need a solid understanding of what drives the US economy to predict where the US Dollar will go.
Role of the Euro
The European Union is the second biggest economic region, only overtaken by the USA. Its most recent nominal GDP is reported at around $15.2 trillion. But what some don’t realize when they look at their EUR/USD live chart, is that the Euro’s growth is predominantly driven by services and manufacturing. As such, when economic activity slows in the EU, the Euro usually weakens.
The Euro is unique because 19 of the 27 European countries within the EU use it. Around 341 million people buy and sell with it every single day. As its popularity has grown, so have the implications of economic and political events in the EU. So, whilst many traders focus on the catalysts behind the US Dollar, to be a successful FX trader, the Euro warrants your attention also.
History
Wind back the clock twenty years, before the mini futures and binary options of today, and the forex markets were a different place. It was the German Deutschmark vs US dollar, plus the French Franc vs US dollar that dominated the scene.
However, January 1st 1999 set the wheels in motion for foreign exchange history. But the road to the Euro had been paved decades before that.
There existed two earlier versions of the Euro, both were internal accounting units for European Community (EC) members. They were:
- European unit of account
- European currency unit (ECU)
Neither were ‘real’ pairs. They were groups of specific EC currencies, engineered to help stabilize European exchange rates. Together, they helped form the EUR/USD we all know today.
The ECU section of currencies had a somewhat alternative makeup to those that were to form the Euro. But the ECU still played a key part in the historical exchange rate of the Euro. The value of one Euro was set as the value of one ECU, when it was first created on January 1st, 1999. So, the initial EUR/USD exchange rate was 1.1686.
Despite this, the Euro wasn’t to become a physical currency until 2002. However, the 1999 launch brought all the eurozone currencies together, including:
- Italian Lira
- French Franc
- Spanish Peseta
- German Deutschmark
It was at this point, that they stopped having separate, floating historical foreign exchange rates. They were bundled together until they were engulfed in the currency of today.
EUR/USD history data and opinion of the time showed many had expectations the Euro would steal the Dollar’s unofficial title as the global reserve currency. However, this is a mountain it has yet to climb.
Key Dates
Taking into account the biggest previous events that triggered substantial volatility and monitoring the EUR/USD today, you may be able to better forecast price movements. Here are some of the most important periods for the pair in recent history:
- Dot-com bubble – 1997-2001 saw speculation that rocked the EUR/USD relationship. It took years for the dust to settle and stability to arrive.
- Real estate bubble – The bubble was thought to be a key driver of the 2007-2009 recession that was hugely damaging to the US economy.
- European debt crisis – The impact of the European Debt crisis is still remembered today, it had a significant impact on the relationship between the two currencies.
- Trump’s election – On the 20th of January 2017, Trump was inaugurated as the US president, this boosted the value of the dollar.
- Covid 19 pandemic – During 2020 and 2021, numerous quantitative easing, interest cuts, and stimulus policies made by central banks influenced the pair. Countries that controlled the virus better were seen as stable economies by investors and lower infection levels resulted in boosts in valuation on either the EUR or the USD side.
- Russia-Ukraine war – Because of the Russian military invasion of Ukraine in 2022, the EUR/USD pair fell to its lowest level since May 2020, strengthening the US dollar further.
EUR/USD exchange rate history and data demonstrate the effect of central bank action on prices. So, perhaps those that analyze the Federal Reserve System will be more able to accurately predict fluctuations in the world’s most popular currency pairing.
On top of the factors highlighted in the timeline above, conflicts, elections and output levels have all influenced the EUR/USD in the past.
Final Word on Trading EUR/USD
When day trading the EUR/USD you should take into consideration fundamental and technical analysis. Economic data releases, central bank statements, and the latest news are just a few considerations your strategy could take into account.
If you want to join the likes of Andrew Krieger and Bill Lipschutz in the forex hall of fame, you will also need to trade at the right time. You may be able to trade 24 hours a day, but the quality of trades often trumps quantity.
For more day trading guidance, see our forex page.
FAQ
Where Can I Find EUR/USD Signals Today?
Websites like TradingView provide an excellent look at today’s price, alongside market signals. See our guide to forex trading signals for our top picks.
What Does EUR/USD OTC Trading Mean?
Unlike trades that are executed on a formal exchange, (OTC) positions are agreed and settled between a broker-dealer network.
When Did The EUR/USD Originate?
After the adoption of EUR by 19 European countries, on January 1st 1999, the forex pair came into being. It has since become the most actively traded currency pair in the world.
What Affects The EUR/USD?
Political events, wars, governmental policies, and production are some of the most influential factors. One notable example is the Russian-Ukrainian conflict, which pushed the pair to its lowest value since March 2020.
Why Is The EUR/USD So Important?
The USA and Europe are the top economic areas in the world. As a result, many countries peg their currency to that of the Euro or Dollar, causing an interlinking between FX pairs. This also makes it popular with retail forex investors.