Forex trading – or foreign exchange trading – is all about buying and selling currencies in pairs. For the buying and selling of currencies, you need to have information about how much the currencies in the pair are worth in terms of the other. This relationship is what defines a currency pair.
A currency pair quotes two currency abbreviations followed by the value of the base currency based on the currency counter.
MAJOR BEST CURRENCY PAIR
The US dollar is the preferred reference in most currency exchange transactions worldwide. It is the dominant reserve currency of the world.
The following are not necessarily the best Forex pairs to trade, as they are the ones that have high liquidity and occupy the most foreign exchange transactions:
EUR/USD (Euro – US dollar)
USD/JPY (US dollar – Japanese yen)
GBP/USD (British pound – US dollar)
AUD/USD (Australian dollar – US dollar)
USD/CHF (US dollar – Swiss franc)
USD/CAD (US dollar – Canadian dollar)
The values of these major currencies keep fluctuating according to each other as trade volumes between the two countries change every minute. These pairs are naturally associated with countries that have financial power, and the countries with a high volume of trade conducted worldwide.
BEST CURRENCY PAIRS ANALYSIS
Let’s take a detailed look at the currency pairs below:
USD/EUR OR EUR/USD – This can be considered the most popular currency pair. In addition, it has the lowest spread among modern world Forex brokers. The best thing about this currency pair is that it is not too volatile. If you are not in a position to take any risk, you can think of selecting this as your best Forex pair to trade, without it causing you too much doubt in your mind.
USD/GBP – The profitable pips and possible large jumps have contributed a lot towards the popularity of this currency pair. However, you need to keep in mind that higher profits come along with a greater risk. This is a currency pair that can be grouped into the volatile category.
USD/JPY – It is associated with low spreads, and you can usually follow a smooth trend as compared to other currency pairs. It also has the potential to deliver exciting profitable opportunities for traders.
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