- EUR/USD is the other side of the dollar. The euro makes up the largest share of the US Dollar Index, so the two move close to mirror images — which gives you a built-in SMT pair on every chart.
- London does the work. The pair’s cleanest ICT sequences tend to form in the London kill zone, with New York either continuing or reversing what London began.
- A pip is ten dollars on a standard lot. Structural stops in the tens of pips make mini and micro lots the realistic sizing tool for most accounts.
- Spread is part of the stop. At the London open and around major releases the spread can widen sharply, and a stop sitting just beyond a level can be taken on the spread alone.
Most ICT examples are drawn from index futures. EUR/USD is where a large share of the methodology was originally taught, and it remains one of the cleanest places to apply it: enormous liquidity, a well-defined session rhythm, and a natural counterpart in the dollar index that makes divergences easy to read.
This page covers what is specific to EUR/USD — the dollar relationship, the session rhythm, pip arithmetic, and the spread — rather than re-explaining the concepts themselves. For the pound, and the cable-versus-fiber divergence, see ICT on GBP/USD.
Why EUR/USD suits the method
- Depth. It is the most traded currency pair in the world, so levels form cleanly and fills are rarely the problem.
- A clear daily rhythm. An Asian session that builds a range, a London session that usually raids one side of it, and a New York session that continues or reverses.
- A built-in comparison. Its close inverse relationship with the dollar index turns every EUR/USD chart into half of an SMT pair.
- Scheduled catalysts. European and US data, plus ECB and Fed decisions, arrive at known times. They are hazards, but predictable ones.
The dollar index relationship
The US Dollar Index measures the dollar against a basket of six currencies, and the euro carries by far the largest weight in it — more than half the index. So when the dollar strengthens broadly, EUR/USD usually falls, and vice versa. The two are close to mirror images.
That relationship is what makes EUR/USD unusually readable with SMT. Because the correlation is inverse, the comparison is crossed:
| You want to be | EUR/USD does | DXY fails to |
|---|---|---|
| Long EUR/USD | Sweeps a low | Make the matching higher high |
| Short EUR/USD | Sweeps a high | Make the matching lower low |
The site’s SMT rule still applies: trade the instrument that swept, in the direction of the reversal, with the stop beyond its sweep wick. If EUR/USD takes its Asian low while DXY refuses to make a new high, the EUR/USD sweep is the false move, and EUR/USD is the chart that carries the setup.
The session rhythm
| Session (New York time) | What EUR/USD typically does |
|---|---|
| Asian, evening to early morning | Builds a relatively tight range; low participation from the pair’s home markets |
| London kill zone, 02:00–05:00 | Raids one side of the Asian range — the Judas — then often delivers the day’s real move |
| New York kill zone, 07:00–09:00 | Continues London’s direction, or reverses it on US data |
| London close | Often retraces part of the day’s move as European positions are squared |
The London sequence is the one to learn first. A sweep of the Asian range extreme against the day’s bias, a structure shift back inside, and delivery toward the opposite side of the range or beyond is the pair’s signature. The Judas swing covers the pattern in general.
Pips, lots and what a stop costs
EUR/USD is quoted to four decimal places for pip purposes; one pip is 0.0001. Because the quote currency is the dollar, the pip value is fixed in dollars:
| Size | Units | Per pip | A 20-pip stop |
|---|---|---|---|
| Standard lot | 100,000 | $10.00 | $200 |
| Mini lot | 10,000 | $1.00 | $20 |
| Micro lot | 1,000 | $0.10 | $2 |
| CME 6E future | 125,000 | $12.50 | $250 |
The practical upshot is flexibility. Spot lots can be sized in thousand-unit steps, so almost any structural stop can be matched to almost any risk budget — which removes most of the excuse for tightening a stop to make a trade fit. The position size calculator handles the conversion.
Spread is part of the stop
On futures the cost of trading is commission. On spot EUR/USD it is mostly spread, and the spread is not constant.
At normal times it is tiny. At the London open, around the daily rollover, and in the seconds either side of major releases it can widen many times over. A stop sitting a pip beyond a level can be triggered by a spread spike without price ever trading there in any meaningful sense.
- Buffer for it. The margin beyond a structural level should account for spread at the time the trade is live, as stop placement covers.
- Know the calendar. ECB decisions, euro-area inflation, US payrolls and US inflation are the obvious ones. Daily bias preparation should include them.
- Check where your broker marks the stop. Some trigger sell stops on the bid and buy stops on the ask, which means a short’s stop can be hit by spread widening alone.
Walkthrough — a London Judas with DXY
The numbers below are constructed to show the decision points cleanly. It is a teaching illustration rather than a record of a trade.
Pre-session. Daily bias long: DXY has been making lower highs all week and EUR/USD is in the discount half of its weekly range. The Asian session has built a range from 1.0842 to 1.0868. The previous day’s high sits at 1.0898. The plan: long after London sweeps the Asian low, with DXY failing to confirm, after a 5M shift back inside the range.
02:38 — the Judas. EUR/USD drops through the Asian low to 1.0824, eighteen pips beyond it. On the dollar index, the matching move would be a new high above its own Asian high. It does not come: DXY stalls several points short. EUR/USD has taken sell-side liquidity; the dollar has refused to confirm the strength that sweep implied.
03:04 — confirmation. A 5M candle closes at 1.0850, through the swing high at 1.0846 that formed during the drop, leaving a gap between 1.0838 and 1.0843.
03:11 — entry. Long at 1.0840 on the retrace into the gap. Stop at 1.0821, three pips beyond the sweep wick — slightly wider than it might be on a quiet afternoon, because the London open spread has not yet settled. That is 19 pips: $190 on a standard lot, $19 on a mini.
Targets. The Asian high at 1.0868 is the first objective, 28 pips away. The previous day’s high at 1.0898 is the second, 58 pips away — about three times the risk. Both are named levels chosen before entry.
What resolves it. The Asian high trades at 04:20, where half comes off and the stop on the rest moves a few pips above entry. The remainder is either filled at a limit just inside 1.0898 during the New York session, or closed at the end of the New York window if the day’s US data reverses the move — whichever the plan specified. Neither outcome is decided in the moment.
Five EUR/USD mistakes
| What people do | Why it fails |
|---|---|
| Compare EUR/USD with DXY the same way round | The correlation is inverse; a divergence reads as EUR low against DXY high |
| Place stops a pip beyond the level at the London open | Spread widening can trigger them with no real move |
| Trade the Asian range as a setup | It is the pool London raids, not the trade itself |
| Ignore the calendar | A US release can reverse London’s move in seconds |
| Size in whole standard lots only | Forces the stop to fit the lot; spot allows the lot to fit the stop |
Learn the London sequence first, keep the dollar index on screen and read it crossed, buffer every stop for spread at the time the trade is live, and use lot sizing to fit the stop rather than the other way round. EUR/USD rewards patience in the Asian session and punishes carelessness around its scheduled releases.