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EUR/USA Dollar

euro dollar currency options trading

Currency is significantly different from other markets, in the sense that the monetary unit of a country is traded against another country’s unit. Unlike with stock or commodities, you invest stock or commodity of its own value.

A wide range of currency pairs are offered by binary options platform, from countries across the globe.  Every pair in the market has its own distinctiveness and suffers from impact of different factors. Traders should recognize this distinctiveness that’s why most are paying great attention to it.

As most part of the world pays US dollar for international transactions, the USD can also be called the intermediary as far as trading in currencies is concerned. Before jumping in ahead the fast-paced world of buying and selling currency in the market, you have to know the pairs that are used in the market the most.
Traders can barter on the major pairs like EUR/USD, USD/JPY, GBP/USD, USD/CAD, USD/CHF and AUD/USD.  Major pairs always include USD as one of the pair, others that are not traded against USD falls into minor pair. They are always kept together due to the fact that the pair’s rate is based on the evaluation of those two specified monetary units.

The world’s most popular pair

Looking at the most common pairs that are traded more frequently in the market than the others, Euro-US Dollar pair has been the most traded and popular in the international market. The pair deals between the Euro and the American Dollar. It is the most active pair in the market today because of its insignificant volatility which attracts investors with different experience. The volume of traders buying and selling this currency makes them the most profitable and the most volatile.

The pair is highly volatile meaning it is good for real time and in the short run. One can trade the currencies several times a day, owing to the constantly changing values.  Those traders who opt for this pair should be always aware of the market movements in Eurozone and USA. This pair is taken up by the major brokers and conventional investors.

EUR/USD pair is also known as the “Euro”. The value of the Euro pair is quoted as 1 EUR x USD. If this pair is affected by some factors that will influence the value of the both in relation to each other, then the interest rate differential will affect the value of both when compared to each other. How the Euro pair works? If the European Economy is doing better than the US economy then EUR gains in value against USD. And if the US economy is doing better than European economy then USD gains value against EUR.

When to purchase a call or put option on the Euro pair?

Now that we know what a pair is, let’s look how it was traded. In Euro pair, the first unit is referred as the “base” and the second is referred as the “quote” or sometimes “counter”.

The stronger the base, the higher the number of the quote is. Trading this in binary options is much more simplified and beneficial compared to the conventional one. You’ll have to choose what currencies you’re going to trade, in this case EUR/USD and you will have to decide if it will end above or below its current price at the end of the hour. If you think that it will end up above the current price, choose the “CALL”. And if you decide that it will end up below the current price, choose “PUT”.

If you take a conventional EUR/USD long position combined with a Stop/Loss and simultaneously buy a “PUT”, you can cover your losses or even be profitable in the event that your long position fails.

The EUR/USD inclines to have a negative correlation with the USD/CHF and a positive correlation to the GBP/USD pairs. This is a result of the positive correlation of the euro, the Swiss franc and the British pound.

Traders may choose EUR/USD pair or try other pair, start trading with us now.

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