Binary Options Trading for Euro and USD
March 30, 2016
Binary options trading isn’t as simple as everyone wants to believe it is. It is darn hard, but its popularity lies in the fact that it is highly probable to get satisfying results. There are plenty of tips and hints on how to be a more successful trader and to find a broker who meets your requirements. Don’t forget too, that you should spend some time trading with a demo account before switching to a real money account. Then start trading Euro and USD for solid results.
Economic growth, interest rates, inflation, production, and employment all play a role in determining the value of a country’s currency. When trading currency pairs in the binary options market, there are a range of currency pairs available from countries around the world. To successfully trade binary options on currency pairs, traders need an understanding of how one currency trades in relation to the other currency that it has been paired with for the trade and in which direction each is expected to move.
The Euro and USD
When trading binary options on the EUR/USD currency pair, the pair compares the value of the EUR to the USD, with the Euro acting a the base currency and the dollar as the counter currency. The Euro, the official currency of the European Union (EU) which is made up of some 320 million people in 15 European countries. This means the Euro has the highest aggregate value of cash that is in circulation. The US dollar is the global reserves currency used by nations all over the world.
Eur/USD means that the Euro is paired with the US dollar, and there are a host of reasons why you should be trading EUR USD. For starters it is the most popular and widely traded pair across the globe in all markets. Factors which influence the price of the Eur/USD include interest rates, retail sales, gross domestic product, GDP growth rate and employment numbers.
EUR and USD are among the most liquid currencies and liquidity is important because it causes prices to change gradually as opposed to quickly occurring price changes. The biggest advantage of trading this pair is that a trader will be able to make bigger trades and will be paying smaller spreads. Certainly if you are a trader starting out in the binary options market, this is a good way to start your trading.
The Eur/USD Pair Weakens
For anyone trading the EUR and USD currency pair, it is important to understand the economic data of the two countries and how lots of factors can affect the price of the pair. During the year from May 2014 to April 2015 for instance, the EUR/USD pair fell from a high of 1.3869 to a low of 1.1144. In January 2015, the European Central Bank announced its quantitative easing program, meaning that from March 2015 till September 2016, the European Central bank will buy 60 billion euro worth of bonds per month. This has led to the EUR/USD pair getting weaker.
A Currency Pair from Sound Economies
The Euro and USD currency pair is too large and too liquid to be impacted by EVERY world issue and this actually makes it more stable than other currency pairs which can be manipulated by the market. While this currency pair has slow movement compared to other major pairs, it is good for novice traders, and the strength of the US- and European economy influences this pair.
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All info was correct at time of publishing