The EUR/USD distinguishes from other currency pairs on Forex by its high trading volumes. There is a reason for it. Firstly, the pair includes two of the most popular currencies in the world with the US dollar taking the lead and the euro going just right behind. Secondly, the pair consists of the currencies of the two largest and strongest economies in the world, namely the US and European ones. This is what makes the pair the most traded instrument in the forex market. Its intraday trading volume often reaches 29%. The EUR/USD pair is a major currency pair as it is traded along with the US dollar. The euro is the base currency while the US dollar is the quoted one. The pair reflects how many dollars are needed to buy one euro. If the single currency begins to strengthen, a trader needs to pay more dollars to buy it. Alternatively, when the exchange rate of the euro decreases, this is a signal that the US currency will assert strength. Like other forex trading instruments, the EUR/USD pair has a number of various features that should be taken into account when trading it. The first feature is its high liquidity, which ensures profitable transactions. Indeed, both the greenback and the euro are considered the most traded currencies in the world. The time of active trading is the second major feature of the pair. Its trading volumes remain high around the clock regardless of the opening of a particular trading floor. Nevertheless, experienced traders stress that during the European and American sessions, the pair's trading volume increases even more. As for the third characteristic, the EUR/USD pair has low spreads. Perhaps, the low spread is one of the main advantages of this pair. Since its liquidity is more than high, spreads on this trading instrument are low. Quite often, they are less than 1 pip. What is more, when it comes to volatility, this pair also differs from others. It is neither high nor low. It is something in-between. Naturally, in case of a market-moving event, the pair's trajectory shows wild jumps that may reach 100 pips or even more. However, history shows that usually, the pair fluctuates within 80 pips. Interestingly enough, the trajectory of the EUR/USD pair is easy to project. First of all, investors are well aware that sharp movements of the pair occur ahead of the release of important statistics in the US or Europe as well as reports of the main central banks on the state of the economy and its prospects. Such publications happen on a regular basis and they are announced in advance. Thus, it is much easier for analysts to make forecasts. Apart from that, technical tools also perfectly display the upcoming dynamics of the pair. There is a nuance though. The trajectory of the EUR/USD pair sometimes may differ from the analysis and forecasts. Luckily, it occurs quite rarely but still it needs to be reckoned with. The sixth feature includes a wide range of derivatives that can be applied to this pair. It allows traders to make transactions not only in the spot market but also on the binary options market, the futures market and so on. Despite the wide range of advantages, beginning market players or those who lack experience are recommended against trading this currency pair. Investors have to sharpen their skills to react quickly to important news and changes in the market sentiment. The best strategies for the EUR/USD pair are pipsing and scalping since the spread is minimal.
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