FOREX BLOG

The trading volume of the forex market, the largest and most liquid financial market in the world, is around trillions of dollars on a daily basis; among which, the trading volume of EUR/USD forex trading activities take a great part and it is regarded as the most traded currency pair in the forex market. In order to trade currency successfully, it is indispensable for traders to know this liquid currency pairs beforehand.

What traders need to know things about USD?

Euro and U.S. dollar are the two mostly used currencies in the world, representing the two major economy entities. As you might know, USD has been considered as one of the safest and reliable currencies for a long period of time around the world and it is the number one reserve currency worldwide. Although the confidence of U. S. dollar and U.S economy has dropped since the financial crisis, the position of U.S. dollar in the forex market still stands firm. Well, you may want to know what determinants affect the USD. Generally, the value of U.S. dollars is influenced by many economic, political and social factors like GDP, interest rate, debts, trade balance, employment rate, inflation, election, and natural disaster and so on.

What traders need to know things about EUR?

Euro is regarded as the second largest currency in the forex market after the US dollar, which is used by the 17 countries that comprise the Euro zone. Therefore, traders shouldn’t underestimate the importance of eurusd forex currency pair since it is one of the most traded and liquid currency pairs in the world. More importantly, the movements of eurusd forex currency pair usually indicate the current forex market status. The value of EUR can be decided by many factors and it is widely used in the Euro zone; thus, traders need to keep informed of what is going on around the entire Euro zone in order to know the trend of this currency pair.

What traders need to be clear when trading eurusd forex currency pair?

Traders need to know more about the currency pair well in order to capture more profits or minimize risks. First of all, traders need to know the most key element that can influence the eurusdforex currency pair is the difference in interest rates between the FED and the ECB. Secondly, due to the great liquidity of this currency pair, many forex brokers usually offer a bid ask spread of between 1 and 3 pips. Moreover, traders need to know that a weakening USD tends to result in an increase in the EUR/USD quote while a strengthening USD is prone to lead to a decrease in the eurusd forex quote. Furthermore, most traders choose to trade EUR/USD between 8 GMT and 17 GMT or the European session due the high liquidity of this time period.

Euros stopped acting strong soon after the agreement on additional 130-billion-euros billout to Greek came out. Euros to US dollars climbed to 8-day high but soon fell. Analysts’ attitude on euros changed from bullish to bearish also pretty soon.

The whole euro-zone is become tougher and tougher to tackle, even 130 billion euros does not seem enough to boost investor’s confidence. Who is to blame?

Greek Economic Situation

The Greek economy is shrinking by over 20%. About 1/5 million businesses were forced to shut down. The most appalling fact is that its unemployment is approaching 25%.

Greek is unsettling
Maybe I should change my saying to Greek has been unsettling. Maybe the Greek people have just become to comfortable with their life style. No matter it is the big protestor march happened Feb 13, or it’s the violence happened last year when they decide to pour the anger into bank clerks to cause lives of innocent people.

It did not really come as a surprise when I heard the interesting news that the angry President Karolos Papoulias attacked Schaeuble and his country. I am surprised that people do not see it coming.

The whole warm and cozy European project is facing the biggest risk now. The perceived risk in analyst’s eyes of European disintegration is growing exponentially.

For Forex traders, it is probably not bad news. No news in the Forex market is bad news. Paying attention to the Fundamental Forex analysis is unexceptional necessary.