EURO / US DOLLAR PAIR
This is the most popular currency pair in the world, representing the world’s two largest economies.
The Euro was created to facilitate cross-border trade of European trading partners. Since its inception in 1999, the pair has faced considerable volatility as the world has faced multiple events of volatility such as the tech boom becoming the tech bust, the real estate bubble, and the European Debt Crisis which still has yet to find long-term resolution.
EUR/USD – Example
In this example, the 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. 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.