Eur/usd signals

Forex traders would consider going long on eurusd currency pair if they believe that Euro would increase in value compared to U.S. dollar.

the currency pair EUR/USD, or "eurodollar," represents the number of U.S. dollars that can be bought with one euro. As the value of the EUR increases, the currency pair exchange rate will also increase.

By going long the EUR/USD foreign currency pair, the currency trader is speculating that the value of the euro will increase in relation to the U.S. dollar. Alternatively, when a forex trader shorts the EUR/USD currency pair, he or she is speculating that the value of the U.S. dollar will increase in relation to the euro.

In EUR/USD , Euro is the base currency and thus the "basis" for the buy/sell. If you believe that the US economy will continue to weaken and this will hurt the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought Euros in the expectation that they will appreciate versus the US dollar.

Conversely, If you believe that the US economy is strong and the Euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will depreciate versus the US dollar.

In a currency pair, the first currency in the pair is called the base currency and the second is called the quote currency.

Currency pairs can be separated into two types, direct and indirect. In a direct quote the domestic currency is the base currency, while the foreign currency is the quote currency.

An indirect quote is just the opposite: the foreign currency is the base currency and the domestic currency is the quote currency.

Although nearly 89% of the currency trades made around the world involve the U.S. dollar, the EUR/USD currency pair is always quoted indirectly. The reason for this is mostly convention.

A EUR/USD quote could easily be shown as USD/EUR by making a simple calculation, but there are no strict rules that determine whether a currency pair is shown directly or indirectly.

The euro-dollar currency pair appeared on April 7, 1989. The initial EUR/USD rate was 1.0445. Statistics for 2007 confirms that 27% of all operations are executed with euro-dollar currency pair.

To the present time EUR/USD pair has been the most traded and popular in the international currency market Forex.

The pair is interesting both for professionals of currency speculations and absolute novices of trading. It is one of the most active pairs in the market and notable for insignificant volatility, attracting traders with different experience on Forex.

EUR/USD pair movements are smooth, but during the day high activity can be noticed and used by the intraday and short-term traders for getting great profit.

Traders who actively work with the euro-dollar currency pair should be always aware of economic events in the USA and Eurozone.