EUR/USD is the largest, most liquid, and most institutionally traded forex pair on the planet. Because of its massive liquidity, its price behavior is smoother, more technical, and often more predictable compared to other majors. (See also: 7 major Forex pairs)

This is not financial advice, only compilation of what happened to be in the past.

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1. General Behavior of EUR/USD

Smooth price action

EUR/USD typically has:

• Fewer erratic spikes than GBP/USD or XAU/USD
• High respect for technical levels
• Clean trends when monetary policy diverges between the Fed and ECB

Tightest spreads in overall forex pairs

Market-making firms keep spreads small:

• 0.1–1.0 pips on ECN type
• Makes scalping and day trading possible

Strong reaction to macroeconomic themes

EUR/USD is driven less by random volatility and more by:

• Inflation trends
• Interest rate expectations
• Central bank policy divergence
• Geopolitical stability

Currency flows are influenced by trillion-dollar bond markets from the US and Europe.

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2. Daily Timing & What Happens in Each Session (GMT0)

EUR/USD behaves differently depending on the time of day:

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Tokyo Session (00:00 – 06:00 GMT)

Typical Behavior:

• Low volatility
• Often moves sideways in tight ranges (5–20 pips)
• Liquidity is thinner

What traders do:

• Range scalping
• Preparing for London breakout

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London Session (07:00 – 11:00 GMT)

This is EUR/USD’s most important session.

• Markets open in Europe
• Liquidity surges
• Major trends start here

Behavior:

• Strong directional breakouts from Asian session
• High-volume moves (30–50 pips possible)
• Very clean reactions to economic releases

This is where most professional traders focus on EUR/USD.

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New York Session (12:00 – 16:00 GMT)

• Second wave of high volume
• Often continues the London trend, unless US news contradicts

Behavior:

• Higher volatility (especially 12:30–14:00 GMT)
• Strong reaction to US data and opening bell of Wall Street

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New York–London Overlap (12:00 – 16:00 GMT)

The most volatile four hours of the day.

Expect:

• 40–80 pip moves possible
• Fast reversals during news

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After 17:00 GMT

Market slows significantly.

• Spreads widen
• Best avoided unless swing trading

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3. Recurring Events That Move EUR/USD

These events move EUR/USD every month or every week and are mandatory to watch.

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A. United States Recurring Events

Non-Farm Payrolls (NFP) – First Friday of every month

Most volatile event for EUR/USD.
Moves can range from 40–120 pips.

CPI (Inflation) – Monthly

The #1 driver of Federal Reserve policy.
Expect big swings at release.

FOMC Meeting & Press Conference – 8 times a year

Massive impact.
Market reacts more to tone than rate numbers.

Fed Officials Speeches

Even remarks about future policy can shift EUR/USD.

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B. Eurozone Recurring Events

ECB Rate Decision & Lagarde Press Conference

Extremely important.
EUR/USD reacts strongly to:

• Rate hikes/cuts
• Balance sheet comments
• Inflation outlook

Eurozone CPI

Inflation trends directly shape ECB decisions.
Often moves EUR/USD 30–70 pips.

German Data

Because Germany is the EU’s largest economy:

• German Manufacturing PMI
• German Ifo Business Climate
• German GDP

These significantly affect EUR/USD.

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C. Weekly Events

US Unemployment Claims (Thursdays)

Medium volatility but consistent effects.

US & EU PMIs (Usually Mid-Month)

Gauge economic strength — moves market sharply.

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4. Volatility Patterns (Important for Strategy)

Daily Volatility Range

Average true range (ATR):

• Low periods: 40–55 pips/day
• High volatility cycles: 75–120 pips/day

EUR/USD volatility is cyclical, often linked to:

• Interest rate divergence between ECB and Fed
• Major geopolitical events

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5. Correlations Traders Should Know

Understanding correlations helps avoid over-exposure.

Asset	Correlation	Explanation
DXY (US Dollar Index)	Strong negative	When USD is strong, EUR/USD falls
Gold (XAU/USD)	Mild positive	A weak USD helps both XAU and EUR
German Bund yields	Positive	Higher EU yields → Stronger EUR
S&P 500	Situational	Risk sentiment changes flows

6. Hidden Characteristics Traders Often Miss

1. EUR/USD trends only when yield spreads diverge

The pair is heavily influenced by:

• US 2-year Treasury yields
• European government yields

When one central bank turns hawkish while the other stays dovish → Major long-term trends emerge.

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2. EUR/USD has “memory”

Because of huge institutional flow:

• Old support/resistance stays strong
• Trendlines and channels last longer
• Break-and-retest setups are more reliable

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3. Liquidity hunts occur daily

Big players often push price to:

• Asian highs/lows
• London session extremes
• Psychological levels (1.0800, 1.1000, etc.)

This often happens before a major move.

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7. Trading Advantages of EUR/USD

• Excellent for beginners due to stable motion
• Best pair for technical analysis
• Tightest spreads in the market
• News behavior is consistent
• Smooth, predictable trends on 4H and Daily

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8. Trading Disadvantages

• Can be too slow for some traders
• High liquidity makes fakeouts well-disguised
• Big moves often driven by news, not random waves
• Requires understanding of global macroeconomics

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9. Best Trading Styles for EUR/USD

Works best with:

• Trend following (EMA 50/200, breakout strategy)
• Supply and demand zones
• Liquidity sweep → reversal strategy
• New York session reversal strategy
• Swing trading based on macro themes

Not ideal for:

• Extremely tight scalping during Asian session
• Impulse-based strategies without context

(See also: 7 major Forex pairs)