EUR USD: Live Euro-Dollar Exchange Rate, Chart and Forecast
As the most traded currency pair in Forex, the largest market on the planet, the EUR USD is also one of the most traded assets in the world. In this analysis, we will take a close look at the EURUSD exchange rate. We will also discuss influential factors on the price of the EUR/USD pair and its forecast. Finally, we will introduce you to the best way of trading the EUR to USD forex pair.
What is EUR USD? Overview
Representing about two-thirds of the trading volume in the currency market, the EUR USD is by far the most popular currency pair in Forex. In practical terms, the price of the EUR USD pair refers to the amount of dollars needed to buy 1 €. This means that the EUR USD pair can rise due to a rise of the Euro, a fall of the Dollar, or both simultaneously. Conversely, the euro USD pair can fall against a falling euro, a rising dollar, or both.
In the end, we can say that the EUR USD pair measures the relative strength of the Euro and the Dollar. In other words, you can only analyse the pair by looking at both sides of the equation.
Therefore, EUR USD traders must look at the economic situation in the United States and the economic situation in Europe. As far as trading is concerned, it is worth noting that most brokers, including ZFX, allow you to trade the EURUSD with high leverage, among other significant advantages that we will detail later on. All these characteristics makes the EUR USD an asset that short-term investors mostly trade.
Below you will find a chart of the real-time evolution of the EUR USD pair. It shows the rate of 1 eur to usd.
How to Read the EURUSD Chart
As we mentioned earlier, the price of the EUR USD pair is the price of one Euro in dollars. It is used to convert EUR to USD.
In the case of the EUR USD pair, the base currency and the Euro is the quote currency and the Dollar. The operation is the same for all currency pairs: The chart expresses the price of the first currency in the second currency. For example, a rate of 1.25 for the EUR/USD pair means that 1 € is worth 1 dollar and 25 cents. In other words, it means that 100 EUR to USD equals 125$.
Please note that it is also possible to access a USDEUR chart, showing the amount of Euros needed to buy 1 Dollar. But it is generally not possible to trade it. It is mainly used by US tourists on vacations, for which it is easier to convert USD to EUR rate that way.
EUR USD Historical Data
In this section, we will look at the historical evolution of the EUR/USD rate. We will first look at the long-term evolution of the EUR USD exchange rate over the last few decades. Then, we will analyse more precisely the current context of the Euro to US Dollar pair.
EUR USD Exchange Rate History
We can break down the historical evolution of the EUR to USD into several distinct phases.
From the mid 90's until the year 2000 the EUR USD pair experienced a strong downward trend, going from 1.38 to 0.8250, a decline of 40% in about 5 years. Then, from May 2002 onwards, the price of the EUR USD then rose sharply, reaching an all-time high of over 1.60 in July 2008, doubling in value in 6 years. Following this record, which remains unmatched to this day, EUR to USD conversion rate began a decline that brought it to a low of 1.0340 in December 2016.
Since then, EUR USD has regained much ground, providing concrete signs that the underlying trend is now bullish. However, the EURUSD price is still a long way from its all-time highs. Therefore, the current moment could be an excellent time to take a long-term position in the Euro Dollar.
EUR USD Exchange Rate Today
Since peaking at 1.2350 at the beginning of 2021, EUR USD exchange rate has fallen sharply, dropping below 1.15 in the last quarter of 2021, notably under the pressure of Fed rate hike expectations.
However, there are good reasons to believe that this correction is now over. Indeed, EUR USD is currently moving close to significant long-term support. This technical context argues for a rebound in the EUR/USD from its current price. However, it also means that if this crucial support breaks, the EURUSD's downside could become much more pronounced.
It’s worth pointing out that most investors trade EUR USD on a short-term basis. Indeed, the volatility of currency pairs and the leverage offered by brokers make EURUSD one of the most popular instruments in the world for short-term trading.
However, it is essential to note that for those who trade the EUR USD short term, the long-term trend does not matter. Furthermore, Traders should note that it is just as easy to bet on the rise as it is to bet on the fall of a currency pair with currency trading. Thus, a downtrend is an opportunity as attractive as an uptrend from the perspective of traders.
What Influences EUR USD Exchange Rate?
Below we will briefly list the main factors that influence the price of EUR USD.
Fed and ECB Monetary Policy
The higher the interest rate of a central bank, the more attractive its currency is to investors. In other words, a high ECB rate is a bullish factor for the Euro. Similarly, a high Fed rate is a bullish factor for the Dollar. EUR USD traders are therefore very interested in the rate differential between the Fed and the ECB.
If the ECB's policy rate is higher than the Fed's policy rate, this is a bullish factor for euro-dollar pair and vice versa. If the Fed's key rate is higher than the ECB's key rate, this is a bullish factor for pair and vice versa.
European and US economic indicators
The evolution of the EUR USD pair also depends largely on the state of the economy in Europe and the United States. If the economic situation is more favorable in Europe than in the United States, this is a bullish factor for the pair. Conversely, if the European economy is less robust than the U.S. economy, this will be a bearish factor for the EURUSD.
To measure the health of the European and American economies, we will rely on various economic indicators. Below is a list of the most influential economic indicators for EUR/USD:
- Non-Farm Payroll Employment Report
- ISM Manufacturing Index
- PMI Index
- Investor Confidence
- German Economic Sentiment Index
- US Weekly Unemployment Claims
- GDP for US and Eurozone
EUR USD Forecast and Predictions
As the end of 2021 approaches, most of the major banks that provide EUR USD forecast have updated their targets for EUR USD at the end of 2022.
Below is a table summarizing these bank EURUSD forecast.
EUR USD Forecast 2022
We can see that the forecasts are quite disparate. One reason for this is that long-term forecasts for the EUR USD pair rarely come true. Indeed, as we have explained, the evolution of the pair depends on central banks' monetary policy and economic indicators, which are events and data highly unpredictable in the medium and long term.
Why Trade EUR USD Today?
Below we will detail the main advantages of the EUR/USD that traders and investors appreciate.
- Trading EUR USD 24 hours a day: Forex is a 24-hour market. Unlike the stock market, which is only open during business hours, it is possible to trade EUR/USD in the evening and night. This is a huge advantage for novice traders, who can continue to pursue a professional activity until they are qualified enough to make a living trading EURUSD.
- High leverage: Another advantage of euro to dollar trading is that brokers offer very high leverage for this currency pair. The leverage allows you to multiply your profits. However, remember that leverage works both ways, also multiplying the potential for losses.
- Volatility creates opportunity: The EUR to USD exchange rate is known as a volatile currency pair that is ideal for short-term trading. This means that it has enough volatility to offer many opportunities daily, yet is moderate enough to allow for reliable analysis.
- EURUSD is easy to follow and analyse: forex traders must only master the basics of technical analysis and follow the European and American economic statistics publications. There is no need to study financial accounts, comb through order books, or closely follow company news, as is the case in the stock market.
Where Can I Invest in the EUR USD Pair?
The easiest way to trade EUR to USD is to use an online broker, such as ZFX. This is a reliable and regulated broker. ZFX provides its clients with the MT4 trading platform, which is the most widely used globally thanks to its many technical analysis and automated trading advantages.
Also, as you can see by yourself with a demo account, the spread for EURUSD is usually lower than 1 pip. Finally, it is worth noting that ZFX offers its clients to trade stocks, indices, forex and commodities.
How to Trade EUR USD Now
Trading EUR USD through the broker ZFX is very simple and fast. Indeed, the account opening is done entirely online, and takes only a few minutes. All you have to do is follow these steps.
1 - Register with ZFX
First, go to the ZFX website, and click on "Open an account". You will then have to fill in a registration form with several personal details. This includes your phone number, which will be verified by SMS.
After filling out the form, click on the "next" button at the bottom of the page. Immediately after this step, ZFX will display your MT4 login and password, and invite you to download the platform.
2 - Make your first deposit
To do this, click on "Make a deposit", on the screen displayed immediately after registration. You will then need to choose a payment method. Let's take Mastercard as an example:
You will then need to indicate the deposit amount and then click on the "Confirm Deposit" button. After that, enter your credit card information before the final validation of the payment.
3 - Account verification
Finally, proceed with the account verification by sending supporting documents.
As shown in the image above, you will need to upload the documents directly to the ZFX website.
4 – Trade EUR USD
Once your documents are validated, you will then be ready to trade EUR USD. To proceed, download and install the ZFX MT4 platform on your device. Then, log in using the details ZFX sent to you. Once you have access to MT4, you can select EURUSD and invest as you wish.
Tips for EUR USD Beginner Traders
Here are essential tips that will help you start trading EUR/USD in the best possible conditions.
- Learn technical analysis: Technical analysis will allow you to analyse trends and therefore know if you should buy or sell. Technical analysis will also allow you to spot trading signals that tell you exactly when to buy and sell. Finally, technical analysis will also help you define your EUR USD trading objectives.
- Practice on a demo account: ZFX offers you the opportunity to test their trading platform in real conditions, with virtual capital. This is an ideal opportunity to practice trading EURUSD exchange rate without risking losing money. Note that most successful forex traders go through this demo account stage.
- Choose a reliable EUR USD broker: In particular, it is crucial to choose a regulated broker that offers an efficient trading platform. You should also check the EURUSD spread and other fees charged by the brokers.
- Build a EUR USD trading strategy: Building a trading strategy relies on choosing the indicators you will use to enter and exit positions. You will also need to define a risk management strategy, among other parameters.
Bottom Line: Is EUR USD a Good Investment Now?
As one of the most popular currency pairs, EUR/USD is one of the favourite assets of short-term traders. Indeed, the potential for gains on EURUSD is high, due to the volatility of the market and the leverage offered by brokers. This analysis also did show that the pair provides many advantages over other assets, such as stocks.
In addition, the long-term prospects of EURUSD also offer exciting opportunities. If you too would like to start trading EUR USD, you can do so easily with ZFX. This reputable broker offers the popular MT4 trading platform and also offers a competitive spread for EURUSD. It also provides access to several other high potential markets.