Hi Andrico,
First, there is no such thing as USD/EUR.
The whole world conforms to a standard set of currency-pair designations, and these designations are determined by a “currency heirarchy”.
The heirarchy dictates that [B]the dollar-euro pairing will always be EUR/USD[/B] (that is, the EUR will always be the base currency in this pair), not the other way around.
For more on this topic, see the second half of THIS POST.
Second, there is no “buying” or “selling” of currencies or currency pairs in the retail forex market (our market), despite what the [I][B]School of Pipsology[/B][/I] and many other sources will tell you. When you take a position in the retail forex market, you are either going LONG, or going SHORT, a particular pair.
In the case of the EUR/USD pair which you asked about, you can take one of two positions:
• you can go long the EUR/USD, if you think the EUR will gain in value against the USD (or, alternatively, if you think the USD will lose value against the EUR) — or —
• you can go short the EUR/USD, if you think the EUR will lose value against the USD (or, alternatively, if you think the USD will gain in value against the EUR).
It’s entirely appropriate to think of these long or short positions as bets on a future change in the relative values of two currencies. It is NOT appropriate to think of these long or short positions as “buying” or “selling” anything. To do so will only screw up your brain.
Since there is no “buying” or “selling” of currencies in the positions you take in the retail forex market, it doesn’t matter what currency you have in your forex account. Your money is not going to be used to “buy” anything, and your money is not going to be exchanged for any other currency.
Your money will simply serve as MARGIN, which you can think of as a good-faith deposit placed with your broker to cover any losses which your trading might incur.
Purge your brain of all that nonsense about “selling one currency in order to buy the other currency”. It’s a gross mis-statement of what’s actually taking place.