The Current State and Future of Forex Trading in Europe

2020 should have been the crowning year for European Forex trading. Instead, it had to endure the contraction of economic growth due to the coronavirus pandemic. And this is after the overlong decision of the UK to separate from the European Union.

The last few months have been full of uncertainty and doubt in the European Forex trading. However, there is always a spark of good news that boosts Europe towards the path of recovery. For instance, the US and China trade war tension is no longer severe, which would further aid the recovery process.

EUR: The Normalization of Numbers?

Practically, there is a good chance that the Euro may begin to strengthen as compared to the USD by the end of the year. At the beginning of the pandemic, the European market had to go through brutal trading and suffered the weakest points for straight four months. However, the last month, June, hints at a new wave of recovery that would normalize trading.

Euro currency trend at the turn of 2020
USD and EUR have managed to garner strong support through the CPI report that pinpoints an upward growth. On the other hand, the sharp decline in oil prices due to the travel  ban  had dire consequences on European economic growth. In fact, the decline was more than 3.4 million barrels each week. Similarly, the deficit in the treasury budget has startled many brokers in Europe.

Overview of the Current Status

If you were to look at the EURO through the lens of the past two years, it continues to expand despite hostile market parameters. It represents the growth and confidence of Europe’s efficient COVID-19 pandemic response. Nonetheless, there have been bad and worse days for the Forex traders in Europe. 

Just like the rest of the world, it will take some time to revert the effects of currency devaluation and ensure market stability in the years to come. However, Europe’s journey to recovery may be shorter than the rest of the world.

Interestingly, the EURO managed to finish its highest two-month reach as compared to USD. Similarly, its trade-weighted index continues to strengthen in the third quarter. Concurrently, numerous trading options are inviting optimism for traders.

Essentially, this sense of optimism is practical and signals more gains against the USD in the next few months. But the prevalence of the confidence among traders will depend on how governments handle the second wave of the pandemic.
That said, most global trading platforms suggests that Europe may be able to outperform its previous economic growth. In fact, its Forex trading platform has the potential to attract a vast amount of capital inflow that will further stabilize the EURO.

Professional and experienced European traders are hoping that the Federal Reserve will choose to implement yield-curve rise control, along with the slight chance of rate-cuts by the  ECB . In hindsight, differentials in interest rate are probably not a threat dangling over the EURO.

European Optimist Persists

Whether it is a political disorder in Germany or the declining manufacturing industry, Europe has always understood the importance of moving forward against all odds. Therefore, the optimism of Europe in itself allows traders to pursue more opportunities.

Investors firmly believe that the stock market is receiving bullish signals through developing technical patterns. In June, the EUR also managed to finish a golden cross against the USD and target growth cycle.

Nevertheless, European Forex traders know how to form realistic expectations regarding a potential upward or downward trend in the financial market. Sure, a higher demand for stock options is a win-win move, but there are still added risks that hint that Euro-bullish traders might not realize its full potential. Most of it has to do with external factors such as upcoming US elections and more trade wars.

Forex Trading in Europe amidst Coronavirus Pandemic

Throughout 2020, the European Forex market’s volatility rate has been quite high. Consequently, brokers are witnessing relatively low activity from clients. That said, since the pandemic, the European markets’ volatility rates have been at all-time highs.

Initially, brokers became the main benefactors and managed to make the most out of the cause-and-effect of market volatility. However, the pressure is mounting, and the eyes are fixed on the possible second wave that may impact European countries’ economics and business sectors.

After the Pandemic: The Future of Forex Trading in Europe

European Forex traders are already experimenting with new online trading platform strategies to take advantage of the market’s high volatility. Whether pandemic becomes a new normal or runs its course, European Forex traders will proceed with due diligence and caution.

Another issue for European Forex traders is to figure out which international currencies may or may not react to coronavirus pandemic in the upcoming months. As the influx of information accumulates across the globe, more traders are opting for minimal trading practices.

It is imperative to understand that the pandemic ultimately wreaks havoc on the currency, and that escalates into economic turmoil. European traders will continue to deal with safe-haven currencies that come with high market volatility.

Similarly, experienced European traders insist on the fact that basic analysis to establish a trading strategy may not be a good idea during the coronavirus pandemic. It all comes down to how up-to-date traders are and how they understand the changing dynamics of the financial market.


Apart from all the obstacles attached to the Forex trading, traders cannot deny the ample amount of opportunities that could pave the way for more growth. As of now, Forex traders are more cautious about the involved risks.

The best course of action for investors is to devise an actionable contingency plan for capital to compensate for any losses. And most importantly, European traders cannot afford to be presumptuous regarding certain aspects of the Forex trading amidst the COVID-19 pandemic.

If the current trend continues, the European market may experience more economic shifts. Therefore, Forex traders should keep an eye on the news sources to ensure their trading activities pan out according to plans.

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