Forex · Instrument guide
EUR/USD trading
What the euro-dollar pair is, why it moves, when it is busiest and how a pip turns into money on a trade.
What is EUR/USD?
EUR/USD is the price of one euro in US dollars. It is the most traded currency pair in the world, so it is the one most traders meet first. If the quote reads 1.0850, one euro costs 1.0850 dollars. The euro is the base currency and the dollar is the quote currency.
The pair is nicknamed "fiber" by some desks. Buying EUR/USD means you expect the euro to strengthen against the dollar. Selling it means you expect the opposite. Because both sides are large, freely traded economies, the pair is deep and orderly most of the time.
What moves EUR/USD?
The biggest driver is the gap between European Central Bank and US Federal Reserve policy. When traders expect US rates to stay higher than euro area rates, dollar assets pay more and EUR/USD tends to fall. When the gap narrows, the pair often rises.
That gap is usually read through interest rate differentials and the two-year government bond yields in Germany and the United States. Watch what officials say as well as what they do, because markets trade the expected path of rates, not just the next decision.
Other inputs matter in turn. Euro area inflation and growth data, the German economy in particular, energy prices that hit European industry, and political stress inside the euro area can all move the euro. On the dollar side, US jobs, inflation and risk appetite do the same.
When is EUR/USD most active?
EUR/USD is busiest when London and New York are both open. That overlap runs for a few hours in the European afternoon and is when volume and volatility usually peak. The exact clock times shift with daylight saving in each region, so check the session map before you plan.
The Asian session is usually quieter for this pair. Ranges are often narrower, and moves can reverse when London opens. See our forex market hours page for the weekly rhythm.
How does a pip work on EUR/USD?
EUR/USD is quoted to four decimals, so one pip is 0.0001. Because the dollar is the quote currency, the pip value comes out in dollars. A standard lot of 100,000 euros is worth $10 per pip, a mini lot $1 and a micro lot $0.10.
Hypothetical example: You buy one mini lot of EUR/USD at 1.0850 and the price rises to 1.0880. That is a 30 pip move. At $1 per pip, the gain is about $30 before costs. If the price had fallen 30 pips instead, the loss would be about $30. Use the pip calculator to check other sizes.
What are the main risks of trading EUR/USD?
The pair looks calm, which tempts traders into large positions. Leverage turns a small move into a large gain or loss on your deposit, and losses can exceed what you put in. A surprise rate decision can move the pair 80 pips or more within minutes.
Liquidity can also thin out. Around the weekly open, on bank holidays and just after major releases, prices can jump past your stop-loss and fill at a worse level. Treat a stop as a plan, not a promise.
Which events should you watch?
Mark these on the economic calendar before you trade the pair.
- ✓ ECB policy meetings and the press conference that follows
- ✓ US Federal Reserve meetings, minutes and the chair's speeches
- ✓ US non-farm payrolls and US consumer price inflation
- ✓ Euro area flash inflation and the German Ifo and ZEW surveys
- ✓ Purchasing managers' index surveys for both regions
How do traders approach EUR/USD?
Because the pair is liquid and often orderly, many traders use it to learn technical analysis. Support and resistance levels, trend lines and moving averages tend to be respected more cleanly than on thinner markets, though no level always holds.
Some traders position around central bank meetings, taking a view on whether the ECB or the Fed will sound more cautious than expected. Others avoid the minutes around releases and trade the calmer hours after. Both approaches need a stop and a written plan.
The euro is the largest weight in the dollar index, so a broad dollar move often shows up in this pair first. If you also trade GBP/USD or USD/JPY, two positions may be one dollar bet in disguise, so count the combined exposure.
What does it cost to hold the pair?
Two costs apply to most forex CFD trades. The spread is the gap between the buy and sell price, paid when you open. The swap is a daily charge or credit for holding a position past the daily rollover, based on the interest gap between the two currencies.
Because euro and dollar rates differ, swap on EUR/USD is not the same for longs and shorts, and it changes as central banks change rates. The figures live in the platform specification, so read them there rather than relying on any number in an article.
How do you trade EUR/USD as a CFD?
A CFD lets you speculate on EUR/USD going up or down without owning any euros. You pick a direction, a size and a stop, and your result depends on the pips the price moves. AQ Markets lists the pair among its forex CFDs on MetaTrader 4 and MetaTrader 5.
Spreads, swaps, margin and trading hours are set per instrument, so check the specification in the platform before you trade. Compare account types, and rehearse on a demo account first.
Risk note. CFDs are leveraged products. Prices can move quickly against you, and losses can exceed your deposit. This guide is general education, not personal advice. Read the Risk Disclosure before you trade.
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