When it comes to trading in the forex market, you simply can’t get into it without any sort of knowledge. After all, if you don’t know about the market, it’ll be impossible for you to create a perfect strategy. So, in this article, we are going to talk about something specific.
— The currency pairs you need to target while trading.
In order to make your job easier, we have broken them down in a step-by-step manner. So, let us get started with the article right away.
Currency Pairs in Forex Trading: Understanding the Basics
Okay, so what do we mean, when we say the phrase “the best currency pairs?” Well, it simply means the best priced “money” that is currently available in the market.
For example, USD or Dollar is one of the most prominent currencies in the world. Now, once you pair it up with something like an Euro (EUR), British Pound (GBP), Japanese Yen (JPY), or Swiss Franc. This, in turn, makes the pair quite strong and successful for trading.
So, let’s learn more about it.
1: EUR/USD: The Kingpin of Forex
Introducing the EUR/USD pair, commonly known as the Forex market’s “Kingpin.” This dynamic duo, consisting of the Euro and the US Dollar, commands a substantial share of total trading volume. It unites two economic powerhouses, the Eurozone and the United States.
What makes this pair a standout player, you might wonder? The Eurozone and the US boast two of the globe’s largest economies.
Therefore, any major economic development or policy shift in either region has the potential to reverberate across the Forex market. So, it’s wise to monitor this pair closely!
2: USD/JPY: The Safe Haven Duo
When it comes to the USD/JPY pair, we’re delving into the dynamic between the US Dollar and the Japanese Yen. The JPY is commonly understood as a safe-haven currency, typically gaining strength in moments of market turbulence or uncertainty.
Numerous elements come into play when considering this pair, such as economic indicators, decisions regarding monetary policy, and geopolitical developments.
So, for those closely monitoring worldwide news and economic stability, the USD/JPY pair should certainly be a focal point of attention.
3: GBP/USD: The Sterling Showdown
Turning our focus to the GBP/USD pair, it combines the British Pound and the US Dollar, offering a trading arena known for its notable volatility. This currency pair presents traders with dynamic opportunities, often influenced by factors such as Brexit negotiations, key UK economic data releases, and announcements from the US Federal Reserve. Brace yourself for the potential for rapid and substantial movements in this market.
4: USD/CHF: The Swiss Surprise
Moving on to the USD/CHF pair, which involves the US Dollar and the Swiss Franc. While it may not always steal the spotlight, this pairing certainly merits consideration. The Swiss Franc, much like the Japanese Yen, is commonly regarded as a safe-haven currency.
It has a tendency to appreciate in value during periods of economic instability. Hence, if you’re seeking a currency pair that offers stability amidst market volatility, USD/CHF could be an appealing choice.
FAQs – Frequently Asked Questions
1: What is a Pip in Major Currency Pairs?
A “pip” stands for “percentage in point” and is the smallest price movement that can occur in a currency pair. For most major currency pairs, a pip is equivalent to 0.0001, except for pairs involving the Japanese Yen, where a pip is 0.01.
2: Which Major Currency Pairs Are Most Volatile?
Volatility can vary over time, but historically, currency pairs involving the Japanese Yen (like USD/JPY and EUR/JPY) tend to exhibit higher volatility compared to other major pairs.
3: Are Major Currency Pairs Affected by Economic Events?
Yes, major currency pairs are strongly influenced by economic events and announcements. Important economic indicators like GDP growth, unemployment rates, inflation figures, and central bank decisions can have a significant impact on exchange rates.
4: How Can I Trade Major Currency Pairs?
You can trade major currency pairs through a Forex broker.
You’ll need to open a trading account, deposit funds, and then use a trading platform provided by the broker to execute trades.
5: Can I Trade Major Currency Pairs 24/5?
Yes.
The Forex market operates 24 hours a day, five days a week, allowing traders to participate at almost any time. This continuous trading is facilitated by different financial centers around the world.
The Bottom Line
Remember, trading in the forex market carries quite a bit of risk. So, make sure to choose the right platform while working there. In our opinion, robomarkets.com can be a brilliant option in this aspect. However, you should still check some other websites and compare them with it to choose the right alternative for you. Good luck!
