What currency pair trend is suggested in the trade idea?

What currency pair trend is suggested in the trade idea?

• A. USD/EUR uptrend.
• B. USD/EUR downtrend.
• C. EUR/USD uptrend.
• D. EUR/USD downtrend.

Answer: (C)

This tests how to read currency pair direction from the quote. For EUR/USD, the price is how many US dollars one euro buys. If that price rises, the euro is strengthening against the dollar. So an uptrend in EUR/USD means euro strength (dollar weakness) relative to the euro. Since USD/EUR is simply the reciprocal of EUR/USD, a EUR/USD uptrend implies USD/EUR is down, not up. For example, moving from 1.05 to 1.10 in EUR/USD means the euro buys more dollars; the USD/EUR quote would fall correspondingly (roughly from 0.952 to 0.909). That’s why the trade idea points to an uptrend in EUR/USD.

This tests how to read currency pair direction from the quote. For EUR/USD, the price is how many US dollars one euro buys. If that price rises, the euro is strengthening against the dollar. So an uptrend in EUR/USD means euro strength (dollar weakness) relative to the euro.

Since USD/EUR is simply the reciprocal of EUR/USD, a EUR/USD uptrend implies USD/EUR is down, not up. For example, moving from 1.05 to 1.10 in EUR/USD means the euro buys more dollars; the USD/EUR quote would fall correspondingly (roughly from 0.952 to 0.909). That’s why the trade idea points to an uptrend in EUR/USD.