Could the euro crash back to parity?
Recent weakness in EUR/USD off of July's high have many traders speculating how low the pair could go. Find out how historical price action can provide context and what other traders believe is the future direction of the pair.
Key points
- EUR/USD is down over 300 pips from its July highs - trading this week close to 1.0900
- Euro last traded at parity against the dollar in November 2022
- IG client sentiment remains long in EUR/USD - 55% of traders believe the pair will rise back toward recent highs
EUR/USD price history
Euro has fallen off its July highs of over 1.1250 to trade close to 1.0900 this week. The low for 2023 came at the start of the year under 1.0600, and the pair traded at parity only two months prior in November 2022. While EUR/USD traded around parity for a few months last year, the most recent price action at 1.0000 prior was all the way back in 2002.
Client sentiment
Even though EUR/USD could hypothetically reach parity or lower in the coming months, the majority of IG traders have taken long positions in the pair. 55% believe the euro will rebound from 1.0900, a long way from parity. Traders will likely look to economic health data releases from the two areas in the short term for guidance, as the next interest rate decisions from both central banks will not arrive until mid-September.
How to trade EUR/USD
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on EUR/USD
Trading forex requires an account with a forex provider like IG. EUR/USD can be found in IG's platform under the 'Major' pairs tab. Many traders also watch major forex pairs like GBP/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like IG’s Trading Academy. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
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