The high daily volume of EUR/USD transactions ensures that the pair has a lot of liquidity which generally results in tight spreads. Liquidity and tight spreads are enticing for traders because they mean that large trades can be made with little impact on the market. Cable, as it is otherwise known, is another pair that is heavily traded. As a matter of fact, it is considered the second most traded pair globally. As well as economic and geopolitical news impacting its own economy, the pair is also sensitive to news affecting the EUR/USD, given its close economic ties to both.

  1. For example, if a quote says EURUSD 1.18, it means that one Euro is worth $1.18 USD.
  2. But the price could be forming a new pattern, falling off a trendline or starting a period of consolidation.
  3. Due to the close geographical proximity of the USD and CAD markets, the currencies don’t tend to diverge very often — but they still do which creates opportunities for profit.
  4. As a consequence, investors often seek out the Swiss franc as a safe haven during periods of increased market volatility.

They avoid ranging markets with the help of indicators that show volume or volatility such as Volume Indicator, Spread Warner, Average True Range (ATR) and others. To answer all these, we need to see how currencies behave and if this behavior is in-line with your trading style. This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument.

How to pick the best pairs to grow your account

These pairs have shown the minimum trading volume at the time of this writing. To keep up to date with any Brexit news that may have affected the price of the EUR/GBP currency pair, visit IG’s Brexit events page. Traders should keep an eye on the US-China trade war as any developments are likely to affect the price of this currency pair. Overall, the USD’s dominance reflects its economic power, stability, and historical precedence, making it the go-to currency for traders. When you first start trading Forex, you may feel overwhelmed daily. When trading the same pairs every day, your brain filters out a lot of noise, making for a clearer mental picture of what is truly happening on the charts.

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Diversify your investments and become a more worldly person in the process. Each individual currency pair largely depends upon its interactions with other countries and the exports it produces. Read the news, check current events and consider events impact governments around the world, investor sentiment and currency prices.

Which is your favourite forex pair to trade?

The USDCHF is negatively correlated to the EURUSD, so if the EURUSD is moving higher the USDCHF is most likely moving lower. Nial Fuller is a professional trader, author & coach who is considered ‘The Authority’ on Price Action Trading. He has taught over 25,000 students via his Price Action Trading Course since 2008.

Recap Of The Best Currency Pairs To Trade For Beginners

Any positions in digital assets are custodied solely with Paxos and held in an account in your name outside of OANDA Corporation. Paxos is not an NFA member and is not subject to the NFA’s regulatory oversight and examinations. The best way to control this instinct is to plan out the exit of the trade BEFORE entering the position and stick to your plan!. Successful traders will seek out trading opportunities where the potential profit is at least twice the risk of loss creating a 1-to-2 risk-to-reward ratio. Many of the best traders implement some form of technical analysis and chart reading. Though the pound would recover in the coming years, it would eventually even out to around £1.60 per $1, never again reaching the high of 2007.

Consider that USD/CHF price action is forming an ascending wedge, where the price becomes squeezed before breaking out. The current resistance zone is holding for several days, but price action is weak, indicating uncertainty in the market. It is not investment advice or a solution to buy or sell instruments. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Therefore, it’s important to implement risk management strategies to limit potential losses, such as using stop-loss orders.

America’s fiscal neighbor to the north and one of their most important trading partners, it should come as no surprise that the values of CAD and the USD are closely related. The value of the Canadian dollar is also heavily correlated with commodity prices. The price for a currency pair is the amount of the quoted currency required to purchase one unit of the base currency. Each currency has a value and the relationship of those values contributes to the price of the pairs.

In 2019, USD/CAD transactions made up 4.4% of daily forex trades.1 The strength of the Canadian dollar is closely linked to the price of oil because oil is Canada’s main export. It is important to take advantage of market overlaps and keep a close eye on news releases when setting up a trading schedule. Traders looking to enhance profits should aim to trade during more volatile periods while monitoring the release of new economic data. Liquidity refers to how easy it is to quickly buy or sell securities for a fair price. If there is high liquidity the bid/ask spread will be tighter and you can trade more without moving the market.

Trade the best forex currency pairs with eToro as your online trading platform. It tends to be positively correlated to the USD/CHF and the U.S. dollar/Canadian dollar (USD/CAD) currency pairs. This relationship is due to the U.S. dollar being the base currency in all three pairs. USD/JPY also responds to nordfx review changes made to interest rates by the Bank of Japan and the effect on the yen relative to the U.S. dollar. Changes in interest rates by central banks, economic data, and geopolitics are the key fundamentals that influence forex markets. A forex/currency pair has the base currency and the quote currency.

Key economic indicators, such as GDP growth rates, significantly influence a currency’s strength and its pairs. Robust GDP growth, like that which occurs in the United States and China, can bolster a currency’s value, which attracts traders to pairs like USD/JPY and USD/CNY (US dollar and Chinese yuan). If you stick with these top 10 Forex currency pairs, you can become a successful Forex trader. When browsing the best currency pairs to trade, aim to find a currency pair with the highest probability. Down to the nitty-gritty, the following section looks at each Forex currency pair in the top 10 list of the best currency pairs to trade.

The Best Currency Pairs to Trade in 2021

The price displayed for a currency pair represents the amount of the quote currency you will need to spend in order to purchase one unit of the base currency. Also, a country that has higher interest rates through their government bonds tend to attract investment capital as foreign investors chase high yield opportunities. However, stable economic growth and attractive yields or interest rates are inexorably intertwined. Sydney, Australia (open 5 p.m. to 2 a.m.) is where the trading day officially begins.

Minor currency pairs, in contrast to major pairs, have lower liquidity and offer fewer trading opportunities. This reduced liquidity can lead to wider spreads and less frequent trading, making them riskier for traders. All currency pairs can be profitable, depending on liquidity and volume plus the Forex trader’s skill. In the list of best Forex currencies to trade, there is a mix of currency pairs suitable for all levels of traders, and we explain why they are the best Forex pairs to trade. The main advantages are these currency pairs have good liquidity and volume, making it easier and potentially quicker to make money from trading Forex. Most of the top 10 Forex currency pairs trend for long periods, making it easier for traders to enter the Forex market with the trend pullbacks.