Focusing on the daily chart of the EURUSD
EUR/USD
The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, behind only the US dollar. This currency pair is the most traded and liquid currency pair on the market.As the most popular trading pair, the EUR/USD is a staple of every brokerage offering and often has some of the lowest spreads relative to other pairs. Ultimately, the currency follows the two most economic blocs in the world and sees the most volume for this reason.The EUR/USD has a wide range of factors that influence its rates. From the EUR side, economic data in the Eurozone as well as internal factors in the bloc can easily impact rates. Even small member states can effectively weigh on the EUR, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and the Federal Reserve commonly affect the EUR/USD. Many examples include the bailouts during the Financial crisis, tax cuts during the Trump Administration, and Covid-19 relief measures, among others.
The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, behind only the US dollar. This currency pair is the most traded and liquid currency pair on the market.As the most popular trading pair, the EUR/USD is a staple of every brokerage offering and often has some of the lowest spreads relative to other pairs. Ultimately, the currency follows the two most economic blocs in the world and sees the most volume for this reason.The EUR/USD has a wide range of factors that influence its rates. From the EUR side, economic data in the Eurozone as well as internal factors in the bloc can easily impact rates. Even small member states can effectively weigh on the EUR, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and the Federal Reserve commonly affect the EUR/USD. Many examples include the bailouts during the Financial crisis, tax cuts during the Trump Administration, and Covid-19 relief measures, among others. Read this Term, the sharp move to the upside today has taken the price above a downward sloping trendline on the daily chart near the 0.9943 level. Just above that is also the July 14 low at 0.99515.
Recall, the market was moving sharply to the downside in July and cracked below the parity level in the process. The low price -off that break – extended to that level at 0.99515 and bounced. The next month or so saw corrective action back to the upside (to a high of 1.03678).
Admittedly in August and September the price traded above and below that 0.99515 level (and parity level as well), before moving to the cycle low of 0.95352 on September 28.
In early October, the price of the EURUSD extended above the July low level again, but found willing sellers near the parity level (the high price reached 0.9999) before rotating back to the downside the very next day (on October 5).
Today, moving back above the 0.99515 level will have traders targeting the parity level once again. The high price has reached 0.99761 so far. The current price trades at 0.9956. That’s just above the 0.99515 level.
Close risk is a move below the 0.99515 level. Move below those levels could see buyers disappointment start to enter.into the market on the failed break.
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This text was written byObserveInvestor based mostly in Geneva, Switzerland. Observe me on Twitter @GenevaInvestor for every day macro & investing nuggets. I write about macroeconomics, international traits, and what I consider are...
