Why EUR-USD is the Favourite Currency Pair Among Traders

Every trader dreams of achieving financial success in the forex market, but the harsh reality often leads to emotional trading, mounting losses, and self-doubt. The key to long-term success isn’t trading every currency pair—it’s mastering one.

Among the numerous currency pairs available, EUR/USD stands out as the preferred choice for traders worldwide. This pair dominates the forex market due to its high liquidity, tight spreads, stable volatility, and strong global economic influence. It offers traders the advantage of 24-hour accessibility, predictable price movements in response to economic events, and lower capital requirements, making it ideal for both beginners and seasoned professionals.

Unlike exotic or less liquid currency pairs, EUR/USD provides a well-structured market with ample trading opportunities, reducing risks associated with erratic price fluctuations. Its deep liquidity ensures smoother execution, while its correlation with major macroeconomic factors allows traders to strategize more effectively.

In this article, we will explore the key reasons why EUR/USD remains the favourite currency pair among traders and how you can leverage its unique advantages to enhance your trading strategy and maximize profitability.

We as a trader dreamed of forex glory but faced harsh reality. Our losses piled up as emotions overruled strategy. Overtrading and revenge trades drained our account. Sleepless nights and self-doubt are sure things to follow to a losing trader. The first year in trading is brutal for all of us.

After a year or few months, we realize that our focus should not be on booking profits but on surviving in this brutal market. Jack of all trades and master of none, will not work in the trading industry. We must master one currency pair and a couple of strategies to win this game.

EUR/USD is one of the favourite currency pairs among traders because of several reasons.

1. High Liquidity & Low Spread

The EUR/USD is a major currency pair and the most traded in the world. It is available to trade on all the major broker’s platforms. Since it is the most traded pair, the volume is at the higher side and spread (difference between bid and ask price) is the lowest in the market. In fact, there is no other currency pair that has a lower spread compared to EUR/USD.

2. Lower Volatility

EUR/USD is a stable currency pair as EUR and USD both are stable and strong currencies. The market volatility is less compared to other exotic currency pairs as it is less affected by news events outside the EURO zone.

3. Clear Trends

The EUR/USD moves in strong trends and remains trending most of the time. If it is in range, it remains in range for a long period of time.

Easy for Beginners

It is one of the favourite currency pairs for beginners to trade as it is easy to apply technical analysis, trendlines, Support & Resistance, and indicators on the chart.

4. Trade With Low Capital

The EUR/USD is the most stable & liquid currency pair, so brokers require lower margin to initiate a trade compared to other high volatile currency pairs.

Ideal for New Traders

It allows trading with less capital. It is not advised to trade with big capital when somebody is just starting.

5. Global Economic Influence

The Eurozone and the USA are two of the largest economies in the world. USA and Europe release economic data (e.g., interest rate decision, GDP reports, initial job loss claims, factory production) almost every week.

Great for Fundamental Traders

These data provide trading opportunities based on fundamental analysis and technical analysis. Hence, EUR/USD is one of the best currency pairs to trade on news events.

6. 24-Hour Market

The forex market runs for 24 hours from Monday to Friday.

Flexibility for Traders

EUR/USD is actively traded across all sessions (European, US & Asian Sessions). A trader can choose any one session and can actively trade intraday as well. The flexibility allows traders to trade with a full-time job as well.

7. Predictable Reactions to News

The EUR/USD often reacts according to the news. It is almost impossible to rig the market.

Opportunities for Strategy Development

News events such as Federal Reserve or European Central Bank announcements make the market move in one direction. Beginners can learn to anticipate these movements and develop strategies accordingly. At the end of the day, each trader needs to develop his/her own strategy.

Tips for Beginners Trading EUR/USD

• Start with a demo account to practice.
• Deposit a small capital ($100) and trade with the smallest possible size.
• Focus on the learning process; you will lose money in the beginning, so lose less.
• Always place a stop loss in the system and not in your mind.
• Keep tracking news events and economic data.
• Do not use leverage more than 40X—over-leverage kills accounts.
• When in profit, do not be quick to book the profit; exit once the stop-loss order is hit.

Conclusion

As Bruce Lee said: “I fear not the man who has practiced 10,000 kicks once, but I fear the man who had practiced one kick 10,000 times.”

As a trader, we need to choose one currency pair to master. And EUR/USD is the favourite currency pair among traders for the above reasons.