Forex trading revolves around buying and selling currencies in pairs. That means you have to have the information about how much the currencies in pair are worth in relation to each other. In this article, we will talk about the major currency pairs and which of them are the best pairs to trade by using Online Forex Trading-Financial Services.
The Major Currency Pairs
As we all know, the most dominant and the most widely traded currency in the world is the US dollar. And this is largely because the USA has the biggest economy in the world.
The US dollar is also the preferred reference in most currency exchange transactions across the world. It’s the dominant reserve currency of most countries.
The following are considered the major currency pairs in the forex market. While they are not necessarily the best forex pairs that you should trade, they are the ones that have the higher liquidity and they occupy 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 pairs keep on moving up and down as the trade volumes between the two countries change all the time. In general, these pairs are the most volatile ones. This means that their price fluctuations can be the largest in the market.
The Best Currency Pairs to Trade
Here are some of the best currency pairs to trade on Online Trading Platform Software among the major ones, with some breakdown of their characteristics.
This is arguably the most popular currency pair. It has the lowest spread among modern world forex brokers. Most of the time, this currency pair is associated largely with technological analysis.
The best thing that traders see in this currency pair is that it’s not too volatile. If you are not too crazy about taking on risks, you can think of choosing this as your best forex pair to trade, without it causing you too much doubt in your mind.
Information about this currency pair is quite easy to find and that can help you avoid making mistakes when investing in it.
The profitable pips and potential large jumps have contributed a lot towards the popularity of this currency pair. However, you need to keep in mind that higher profits usually carry with them greater risks.
The USD/GBP is a currency pair that can be considered to be volatile. On the other hand, many traders tend to choose this as their best currency pair because of the rich and plenty market analysis information.
The USD/JPY is another favorite currency pair that a lot of traders are choosing in the world of trading. It is usually linked to low spreads and you can typically track a smooth trend as compared to other currency pairs. It also has the potential to provide exciting profitable trading chances for traders.
All major currency pairs that you can find in the modern world come with tight spreads, with the exemption of the USD/GBP because of its volatility. It’s better to veer away from currency pairs with wide spreads.