Q:

How do you read a forex chart for Euros and U.S. dollars?

A:

Quick Answer

Read a Forex chart for the euro and U.S. dollar by tracking the pair’s value over time from left to right, with the most recent price farthest to the right. The chart displays the number of U.S. dollars needed to purchase one euro at specific points along a selected time period.

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Full Answer

For example, if the price plotted at a particular spot on the chart is 1.1543, it means that on the corresponding date and time designated it took approximately $1.15 to purchase 1 euro. A Forex chart displays the dates and times for each exchange pairing below the vertical axis at the bottom of the chart.

Forex charts for the euro and the U.S. dollar are available in a variety of time frames, from monthly down to minutes or even seconds. The chart usually indicates the time frame in its upper left-hand corner and lists the range of values vertically along its right-hand side.

A line chart is the most basic type of Forex chart. It plots the pair’s closing prices for each time unit and connects them with lines. A bar chart consists of relatively short vertical lines that represent the highest and lowest prices during a given time unit. The chart also includes a single tick on its left- and right-hand sides to mark each period’s opening and closing price.

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