The top 2 most traded currencies in the international community are always in high demand when it comes to trading and with good reason, they are always likely to be on the move, and the shrewd trader can turn a relatively great profit in a short amount of time.
Since its introduction into the global market at the beginning of 1999 the Euro has proven to be a very viable trading commodity, as more countries have joined the European union, it’s overall financial strength has increased, causing the Euro itself to gain value versus other world currencies, and the US Dollar in particular.
In early trading, the Euro traded as low as $0.82 but since mid-2002 it has been gaining in value versus the Dollar, peaking at $1.60 in 2008.
The US Dollar does not really require an introduction to even the most novice of traders, it is the #1 traded currency in the global markets, and is often a reflection of the financial might of the US. The price for Gold and many other commodities is set in USD; most countries hold a great deal of their currency reserves in dollars, while smaller countries sometimes forgo having a currency of their own in favor of the dollar.
Like most binary options trading in the EUR/USD pair requires an understanding of markets, their movements and at least some flexibility, that being said, there are great benefits to trading such a popular pair: great liquidity – because of the sheer amount of trades they can provide you with multiple entry and exit points to suite your every preference and need, relative predictability – while some currencies can shift greatly in a short amount of time, most believe that the EUR/USD pairing will not have such rapid movements which can assist you in avoiding massive pitfalls.
To understand, and profit from EUR/USD binary options trading one should probably have at least a basic understanding of the financial process in both the US and the European union, as movements occurring in both will have a quick effect on their respective currencies, luckily, knowledge of upcoming events and their possible outcome is made rather easy by various internet sites and television stations which will very likely have a great deal of coverage on any important events in the market, so keep close to your various reporting outlets, as they can help in making a great profit.
While there are many ways for one to profit from this pairing, one possible way is to consider the endless news cycle, which, due to the time difference between Europe and the US, this means that you can have a rather large window of trades every day, as the Dollar begins trading right around the time the Euro ends.
If you can correctly predict certain world events, or react to them quickly as they happen, you could potentially turn a hefty profit.
When considering the direction the euro will take, you should really consider happenings in all of the member states in the Eurozone, as an individual crisis localized to one country can affect the flow of cash in the entire Eurozone, as was the case with events in Greece and Spain over the last couple of years.
Any increase or decrease in one side of the pairing will almost always cause an opposite reaction in the other, so an upcoming increase in US interest rates will very likely cause the value of the dollar to increase versus the euro.
On the opposite side – a new country being voted into the European Union will certainly cause a rise in the value of the Euro, as the influx of a new economy will assist other member nations.
In addition to localized events in European countries and across the US, one should also pay attention to global financial and political happenings, even if they do not seem to be directly correlated with either currency, ripples in China, India or elsewhere can very quickly escalate to something with substantial effect on Europe and the US.
Yes, trading in EUR/USD can be somewhat complex at first; however, if you learn to use events and day to day financial movements in your favor you could very easily be spending your next vacation in Paris or New York!