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Admiral Markets UK Ltd

Regulated by the Financial Conduct Authority (FCA)
  • Leverage up to:
    1:30 for retail clients,
    1:500 for professional clients
  • FSCS protection
  • Negative balance protection
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Admiral Markets Pty Ltd

Regulated by the Australian Securities and Investments Commission (ASIC)
  • Leverage up to:
    1:500 for retail clients
  • Volatility protection
  • Negative balance protection
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How to trade EUR/USD

The Euro against the US Dollar (EUR/USD) is the most traded currency pair on the forex market. In this article, we'll see in detail how to trade EURUSD.

Here are 20 points that we are going to address:

  1. How to buy EURUSD
  2. How to short sell EURUSD
  3. How to make a good Euro Dollar analysis/forecast
  4. 2018 EURUSD Forecast
  5. EURUSD Evolution and buy forecast
  6. EUR USD Short forecast
  7. Trading platforms to trade EURUSD
  8. The EURUSD currency pair
  9. When are the best trading times for EUR USD
  10. Speculation on EURUSD – Which factors influence the price
  11. Which broker to trade EURUSD
  12. Trading conditions for EURUSD
  13. Best EURUSD indicators
  14. Trading EURUSD – Correlations
  15. Strategy for a simple and efficient EURUSD trade
  16. Trading EUR USD – Benefits
  17. Trading types for EURUSD
  18. EURUSD Evolution since the last 10 years
  19. 2018 EURUSD Trend
  20. How to trade EURUSD in real time

What is EURUSD – Definition

The Euro against the US Dollar is the principal currency pair on the forex market. EURUSD represents the Euro exchange rate against the US Dollar one. If the price is 1.2000, it means that to buy one Euro (EUR), we need 1.2 US Dollars (USD).

EURUSD can be used in the real economy exchanges, as much as a financial instrument to speculate on the exchange rates between both currencies.

How to buy EURUSD

Buying EURUSD has become very simple. Here are the steps to follow to place a buy order (on the MT5 trading platform).

  1. Open and login to your trading platform
  2. Click on the shortcut 'New Order', located on the toolbar at the top left of your MetaTrader trading platform
  3. Select 'EURUSD, Euro vs US Dollar' in the 'Symbol' space
  4. Select your position size in the 'Volume' space
  5. Click on the blue button 'Buy by Market'

We recommend to always use a stop loss and a take profit in order to control your risk, and also your profits if the market moves in your direction.

To do so you need to:

  1. Fill in the stop loss price level in the 'Stop Loss' space
  2. Fill in the take profit price level in the 'Take Profit' space

Let's have a look at the steps on the chart to buy the single currency against the US Dollar.

Source : CFD EURUSD, M15 Chart, MT5 Admiral Markets, 31st of August 2018

As shown above, it is possible to place a stop loss and a take profit once the position has been opened by moving the position line.

Here is an example for a buy position:

  • If you slide down the EURUSD buy position line, the stop loss will have for value the price level where the cursor stopped
  • If you slide up the EURUSD buy position line, the take profit will have for value the price level where the cursor stopped

A good risk and money management is essential. This is why Admiral Markets provides you an Expert Advisor (EA) Mini Terminal. Which allows you to:

  • Calculate your position size according to the price level of your stop loss
  • Place limit orders (buy stop, buy limit, sell stop, sell limit) on your charts if you can't stay in front of your trading platform

Source : CFD EURUSD, M15 Chart, MT5 Admiral Markets, 31st of August 2018

How to short sell EURUSD

  1. Open and login to your trading platform
  2. Click on the shortcut 'New Order', located on the toolbar at the top left of your MetaTrader trading platform
  3. Select 'EURUSD, Euro vs US Dollar' in the 'Symbol' space
  4. Select your position size in the 'Volume' space
  5. Click on the red button 'Sell by Market'

We recommend to always use a stop loss and a take profit in order to control your risk, and also your profits if the market moves in your direction.

To do so, you need to:

  1. Fill in the stop loss price level in the 'Stop Loss' space
  2. Fill in the take profit price level in the 'Take Profit' space

Let's have a look at the steps on the chart, to benefit from the declining price of the Euro against the US Dollar.

Source : CFD EURUSD, M15 Chart, MT5 Admiral Markets, 31st of August 2018

As shown above, it is possible to place a stop loss and a take profit once the position has been opened by moving the position line.

Here is an example for a sell position:

  • If you slide up the EURUSD sell position line, the stop loss will have for value the price level where the cursor stopped
  • If you slide down the EURUSD sell position line the take profit will have for value the price level where the cursor stopped

A good risk and money management is essential. This why Admiral Markets provides you an Expert Advisor (EA) Mini Terminal. Which allows you to:

  • Calculate your position size according to the price level of your stop loss
  • Place limit orders (buy stop, buy limit, sell stop, sell limit) on your charts if you can't stay in front of your trading platform

Source : CFD EURUSD, M15 Chart, MT5 Admiral Markets, 31st of August 2018

How to make a good Euro Dollar analysis/forecast

A common approach used by experienced traders to achieve a good analysis is to study:

  1. The long-term trend
  2. The current trend
  3. The price action

Let's see how to do it!

The long-term trend

It is essential to always look at larger time frames to identify the long-term trend. This step is very important in order to get the best possible odds.

Therefore, it is common to start a long-term trend analysis from the daily chart to determine if it is bullish or bearish. Here, you can use the Dow theory or simple moving averages (SMA).

The current trend

It is important to learn how to read the current Euro trend without doubts in order to know if it's in correlation with the long-term trend from the daily chart.

You can then look at a smaller time frame such as the H4, where each candlestick represents 4 hours on EURUSD or the hourly chart where each candlestick represents one hour.

You just have to use the same method to check if the current trend matches or not the longterm trend.

Let's have a look at an example for a EURUSD long-term trend analysis on the H4 time frame, in correlation with the M30 time frame.

Source : CFD EURUSD, H4 and M30 Charts, MT5 Admiral Markets, 31st of August 2018

In this example, you can see on the H4 time frame that the bullish long-term trend is indicated by a 20 period exponential moving average (in blue) above the 50 one (in red).

Now that the long-term trend has been identified, we just have to go on the M30 time frame looking for the same configuration regarding our moving averages (to determine if the longterm trend matches the current one).

It is important to keep in mind that an analysis which takes in to consideration different time frames allows you to have a better vision of the market and of the trend. It is a common mistake made by trading beginners to forget this step. Chances of success are increased thanks to this kind of analysis.

There are also multiple technical indicators, but it is wiser to only use a few of them to keep a clean chart.

Let's see a tangible example!

  • If you're using 12 indicators, you might have conflicting signals which is a problem when it comes to making a decision
  • On the other side, if you're using only 2 to 4 complementary indicators they can help you confirm your EURUSD signal

It is essential to use the right tools.

The most simple methods are sometimes the best, such as :

  • Using one or more moving averages
  • Using the Mini Terminal and its HLS button

This button allows you to automatically identify the last top and bottom to find the closest supports and resistances without forgetting the trend and the momentum.

Source : CFD EURUSD, H4 Chart, MT5 Admiral Markets, 31st of August 2018

Price action

This indication regarding the last top and bottom aids the trader in his price action interpretation while looking at the price localization compared to those levels.

Example :

  • If the price breaks the last top and closes above it, the price action of the candlestick shows us an intention to pursue a bullish move
  • If the price breaks the last bottom and closes under it, the price action of the candlestick shows us an intention to pursue a bearish move

Price action is the most accurate, precise and fast form of information you can receive. It is important to keep in mind that any technical indicator is always late compared to the price as it is a mathematical derivative of it.

Price action is often used to confirm:

  • A trend
  • A buy or a sell signal
  • A EURUSD setup

It is also important to complete your price action analysis with the interpretation of Japanese candlesticks.

Example:

Here is a resistance level (in red) on EURUSD. The candlestick shown is an inverted hammer making a rejection of the 1.1730 resistance level. Of course, price action signals are more accurate when they take place near key levels (such as supports or resistances).

Source : CFD EURUSD, D1 Chart, MT5 Admiral Markets, 31st of August 2018

2018 EURUSD Forecast

At this point, on the 22nd of August 2018, the price tested the 1.1300 level before bouncing in the direction of the indecision triangle bottom trendline (breakout happened at the beginning of month).

The monthly context remains bearish, with the last bottom breakout (1.1510). Furthermore, the Mini Terminal tells us :

  • Bearish trend
  • Negative momentum

The price is bullish since the rejection of the 1.1300 level but nothing allows us to assume this movement will keep going up.

On the contrary, we could expect a sell pressure following the bearish cross between the 20 month exponential moving average and the 50 one. While keeping in mind that an indecision triangle is taking shape on the monthly time frame, the rest of the year might allow us to test one of the two limits of the consolidation pattern.

Source : CFD EURUSD, D1 Chart, MT5 Admiral Markets, 22nd of August 2018

EURUSD Evolution and buy & sell forecast

A medium-term bullish scenario is only possible if the price breaks above the bearish trendline, which used to be the daily indecision triangle upper trendline, in correlation with the 1.1740 resistance level.

Therefore, we could expect from the price to form a throwback to test the 1.1930 and 1.2100 levels just before the bearish trendline and the 1.2260 obstacle level.

The recovery of the bearish move could happen following the current test of the 50 day exponential moving average. The element which can't be neglected is the bearish trendline, this used to be the daily triangle upper trendline (broke on the 2nd of August 2018).

As you may see on the previous chart, the latest high is also located in this zone, at 1.1630.

We should not forget to look closely at the 1.1530 level test in case both exponential moving averages would reject the price. This bearish move may then continue in the direction of the indecision triangle bottom trendline; just under the 1.0860 support level.

Trading platforms to trade EURUSD

At the moment, you can trade the EURUSD currency pair threw a trading platform installed on your Mac or Windows computer.

If so you can download:

  • MetaTrader 4
  • MetaTrader 5
  • The Supreme Edition plugin to freely access professional EA and indicators

Both platforms are intuitive, fast and efficient. MetaTrader 4 and 5 are widespread and used worldwide by traders.

You don't want to install the platform on your computer?

With Admiral Markets and the MetaTrader WebTrader, it is possible! You can access your trading platform without installation from any computer.

You're looking for a way to trade and manage your trading account from your smartphone?

From now on, it's also possible with:

Don't hesitate to open a demo account in order to try the applications available with Admiral Markets, designed to ease your Euro Dollar trading.

The EURUSD currency pair

The Euro Dollar pair has a 0.0001 pip step for 4 digit brokers and a 0.00001 step for 5 digit brokers such as Admiral Markets.

Euro Dollar is the most exchanged currency pair in terms of volume.

For example, on the 30 of August 2018, the Euro Dollar price as a 87 pips average fluctuation per day since the beginning of the year. It means that every day on average, a 87 pips upward or downward movement happens. (Source MT5, 30 of August 2018). This represents everyday trading opportunities for wise Euro Dollar traders.

Volatility is very important as without it, there is no movement on the forex market. Volatility is usually associated to risk, but we tend forget that it is also synonymous to opportunities!

The opportunities which are the result of volatility on the forex market can be risky if the risk management is not appropriate or if the strategy used is too subjective (lack of strict rules).

However, for the trader who is aware that adopting good risk management and a wellestablished trading plan, trading the Euro Dollar can be a rewarding and exciting activity.

When are the best trading times for EUR USD

The forex market is open 24 hours a day and 5 days a week but some hours are more volatile than others. Thus, it is usually during these hours experienced traders operate on the market.

Here are the most profitable time slots to trade the forex pair EURUSD:

  1. From 9h00 to 12h00 Paris time (GMT +2), so 10h00 to 13h00 on the MetaTrader platform

Above are the opening hours for European stock exchanges. During these time slots, exchanged volumes and transactions increase leading to higher volatility.

  1. From 15h30 to 18h30 Paris time (GMT +2), so 16h30 to 19h30 on the Metatrader platform

Above are the opening hours for American stock exchanges and the second half of the European session. During these hours, most European and American traders are active. Exchanged volumes and transactions are usually higher, just like the EURUSD volatility.

And there is more!

Current events and economic news regarding the single currency against greenbacks play a very important role.

That's why many traders enjoy trading the economic calendar. This allows them to only trade for a few minutes around publication times which sometimes generate large moves.

Regardless the investment horizon you have when it comes to trading (swing trading, scalping), timing is important. Most beginners obsession is to enter the market in due course and at the right price while forex swing traders one is to enter right after the good economic data.

Here is an example with the US Federal Reserve interest rates publication:

Source : CFD EURUSD, M30 Chart, MT5 Admiral Markets, 21st of March 2018

The publication was released at 20h00 Paris time (GMT +2). The EURUSD price response was bullish, and stayed as for a week.

Let's now take another example with the ECB (European Central Bank) interest rates publication:

Source : CFD EURUSD, M30 Chart, MT5 Admiral Markets, 26 of October 2017

The publication was released at 13h45 Paris time (GMT +2). The EURUSD price's response was bearish, and stayed as for a couple of days.

This is the kind of movement and response that fundamental Euro Dollar traders are looking for.

Which factors influence the price

The forex currency pair EURUSD represents the power balance between the world's largest economy and the European zone. That's why economic news from both sides impact the pair.

Here is a list of both American and Europeans economic news which may affect the Euro Dollar price:

  • Interest rates (FED and ECB)
  • Press conferences (FED and ECB)
  • Unemployment rates - Balance of trades (BoT)
  • Nonfarm payrolls (NFP)
  • Inflation rates
  • Gross Domestic Product (GDP)
  • Retail sales
  • Durable goods orders
  • Consumer confidence

You can find the Admiral Markets economic calendar on our website!

When it comes to trading the Euro Dollar, there are opposing opinions:

  • Technical analysis

The technical EURUSD trader/analyst relies on price action and technical indicators to identify a trend and take position.

For these traders, technical levels such as supports, resistances, trendlines or important moving averages will have an impact on the single currency.

  • Fundamental analysis

The fundamental Euro Dollar trader/analyst only relies on economic data interpretation and geopolitical contexts to define and foresee the next EURUSD trend.

Some traders adopt a mix of the last two approaches in order to increase their success rate on the EURUSD pair.



Which broker to trade EURUSD

A broker is a financial intermediary. It allows you to access the desired price when you want, in order to take advantage of a potential move identified thanks to your analysis, and triggered according to your CFD trading strategy.

Let's now list the trading conditions provided by the CFD broker Admiral Markets Pty Ltd:

  • Competitive rates – Usual EURUSD tight spread of 0.8 pip

The smaller the spread is, the quicker your Euro Dollar trade will be in profit!

  • Very fast trade executions

A good speed execution allows the trade to be executed at the desired price in due course.

  • No fees are applied when you enter or exit a EURUSD trade

For EURUSD scalpers and day traders who trade with Admiral Markets, transaction fees are limited to the spread!

  • Professional trading platform : MetaTrader 4, 5 and Supreme Edition
  • "Pro Cash.back" loyalty program which is now open to clients, according to the Admiral Markets Pro conditions. Professional clients will receive rewards when they trade, month by month, automatically. Your reward is calculated depending on your monthly trading volume, based on closed positions.

Best EURUSD indicators

A good EUR USD trader uses reliable forex indicators, such as the ones you can find on the MetaTrader 4 and 5 Supreme Edition (MTSE).

Here is a sample of free indicators contained in the MTSE:

  • Admiral Donchian to get potential forex trading signals
  • Admiral High-Low to identify major key levels
  • Admiral Keltner for Keltner channel traders
  • Admiral Mini Chart to display several time frames on one and only chart thanks to renko and tick charts
  • Admiral Pivot for EUR USD pivot traders
  • Admiral Renko to find price action signals
  • Admiral Symbol Info which allows to display trading signals from a dozen indicators on a same small window on your chart

Admiral Markets also provides a free plugin to its clients, which offers a large choice of indicators and professional Expert Advisors (EA) with many customizable options and alerts to assist your daily trading.

Trading EURUSD – Correlations

In this section, we'll get into recent correlations between the Euro Dollar and other CFD financial instruments.

Remember that correlations between different CFD financial instruments tend to evolve over time, that's why it is necessary to have a reliable tool such as the "Admiral Correlation Matrix" EA in order to analyze the behavior changes and take advantage of them.

This Expert Advisor is included in the MetaTrader Supreme Edition plugin freely available at Admiral Markets.

Source : CFD EURUSD, W1 Chart, MT5 Admiral Markets, 22nd of March 2018

  • As you can see above, EUR USD is correlated with other major forex pairs like GBP USD or USD JPY

The last two remain strong with scores of +72 for the British pound and -71 for the Japanese yen.

This shows that when a move appears on EURUSD, GBPUSD will tend to follow the same direction whereas USDJPY will most likely take the opposite direction.

  • Correlations with stock indexes like CFDs DAX30 or S&P500

Here, the correlation matrix illustrates negative scores with both CFD stock indexes : -59 for the German stock index and -50 for S&P 500 index.

This shows that when a move appears on the most traded forex pair, the German stock exchange will tend to move slightly towards the opposite direction, just as the American stock exchange.

  • Correlations with commodities like CFD Gold and WTI

Thanks to the previous image, we can see a +54 correlation with gold and +93 with oil.

This shows that when a move appears on the Euro Dollar, oil will most likely follow the same trend. Whereas probabilities that gold does the same are lower.

  • Correlation with Crypto Currency CFDs

This correlation study ends with the Bitcoin crypto currency CFD. As you can see, the correlation between EUR USD and Bitcoin is nonexistent with a score of -6.

This shows that when a move appears on one of the two financial instruments, it will not affect the direction of the other.

Strategy for a simple and efficient EURUSD trade

Many strategies can be used to trade the Euro against the US Dollar but are they worth it?

Absolutely not!

Why does a trading strategy need to be simple?

It is important to keep your trading strategy moderately simple as you're going to use it every day. If your strategy is too complex, you will be more likely to make mistakes which may one day cause you to lose money. Moreover, a simple strategy allows accurate backtests.

Discipline and a perfect respect of your trading plan are then sufficient.

Let us present you some free trading strategies:

  • How to trade with Ichimoku, which is part of the "Independent Trader" formation, and our "Ichimoku SAR Forex Strategy"
  • How to trade EUR USD using Bollinger Bands, which is a good approach to swing trading


Trading EUR USD – Benefits

The Euro against the US Dollar is the most traded and exchanged currency pair for several reasons:

  • Available to anyone with leverages up to 1:30 for retail clients and up to 1:500 for professional clients
  • High volatility with a 87 pips average move per day since the beginning of 2018
  • Opened and tradable 24 hours a day, 5 days a week
  • High liquidity which is the best when it comes to trade executions

For example, Admiral Markets provides trade executions at the best market price, within a few milliseconds.

  • No restriction regarding stop loss sizes, trading profiles or strategies

Trading types for EURUSD

There are 3 main trader profiles for the Euro Dollar :

  • Scalping
  • Day trading
  • Swing trading

EUR/USD Scalping

The Euro Dollar scalper takes advantage of small time frames, only looking for a few pips. This method is broadly called "Scalping".

The EUR/USD Day trader

Here, the trader has to use a "Day Trading" strategy. The goal is to open and close trades within the same day or trading session.

The EUR/USD Swing trader

With this approach, the trader almost becomes a medium-term investor as he'll try to take advantage of a EURUSD trend which may last for weeks or months, without spending much time in front of his trading platform. This method is called "Swing Trading"

The 3 trading types match precise different personalities and profiles. However, most profitable traders usually use at least 2 out of the 3 styles, and sometimes even all 3 of them.

Why?

For a very good reason which is that in trading, a good portfolio diversification requires as much an array of financial instruments as different investment horizons for your trades.

Therefore, a swing trader who is also a scalper will have very different results for each approach at the end of the month. They might be good or bad, depending market conditions and the strategy used.

  • Sometimes, swing trading will have better results than scalping
  • Sometimes, it will be the opposite
  • Sometimes, both will give same results

Besides the extra potential profit, this approach allows the investor to have more consistency in his results. Indeed, scalping provides signals even when there is a low volatility, which leads to more trading opportunities.

EURUSD Evolution since the last 10 years

Do you know what the EURUSD history looks like?

If you don't, we're going to explain you the context and analyze what happened over the last 10 years.

To do so, it is easier to start the analysis on a monthly chart (MN), which is a time frame available on your MetaTrader 4 or 5 platform.

Source : CFD EUR/USD, MN Chart, MT5 Admiral Markets, 13 of August 2018

  • 2008

The first observation we can make is about the historic high at 1.6038 over the last 10 years, reached in July 2008. Actually, we can see on lower time frames that Japanese candlesticks form a double top pattern. The breakout of this pattern happened just below the 1.5284 level. Since, the price retraced in direction of both 50 and 20 period exponential moving averages (EMA).

The 2008 year was bearish, but without calling the long-term trend into question.

  • 2009

From a technical perspective, the retracement towards both EMAs represents a need to find a dynamic support, in order to initiate a new bullish long-term trend.

This new trend reached the 1.51399 around the end of the year 2009.

  • 2010

Only within a few months, investors started doubting about this bullish trend after a new low in June around the 1.18758 level.

  • 2011

Ever since this moment, according to the Dow theory, the bearish moved kept on going with a lower high at 1.49385.

  • 2012

The bearish trend consolidated itself with a new low around the 1.20421 level.

  • 2013

Throughout 2013, price levels illustrate a comeback above both 50 and 20 monthly EMAs. This year slightly bullish.

  • 2014

A lower high at 1.39935 is in correlation with the bearish trendline. This lower high formed the third test of the indecision triangle's upper trendline.

  • 2015

The bearish trendline rejection led to a breakdown below the last low in early 2015. The year finished with the lowest lows of the example's decade.

  • 2016

All along the next year, the price remained in a trading range, failing to form significant new highs or lows.

  • 2017

In the end, the 2014 trendline rejection led to a new historic low over this 10 year period, at 1.03402.

Due to this new record, the Euro bounced back to end the decade at the 1.20013 level, allowing 2017 to end bullish.

2018 EURUSD Trend

It's now time to make a 2018 EURUSD analysis.

Do you remember the forex trend of the European currency in 2017 ?

The price was bullish all year. As a result, the price tested the trendline which was formed by the previous structures over the decade in early 2018.

This retest led to a strong trendline rejection, creating a new high at 1.25547.

Ever since, sell pressure control exchanges, despite a 2 months consolidation between June and August, through-out which a daily indecision triangle was formed.

It has taken until the 2nd of August for sell pressures to reiterate themselves. Thus, it is a bearish move we can see on the Euro Dollar daily chart.

This bearish move took action between two consolidation phases:

  • Firstly, a consolidation period below the monthly bearish trendline
  • Then, another one with the daily indecision triangle

How to trade EURUSD in real time

EURUSD is highly volatile, as shown by the last strong bearish moved!

You wish to get access to EURUSD price forecast and follow its evolution in real time on your screen?

You want to go further and put your knowledge into action while developing it even more? Open a demo account and trade EURUSD today.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.