There are three categories of currency pairs in the Forex market. The main currency, crosses, exotic or rare. The following will explain which currency pairs are within the major category and the advantages and disadvantages of it.
EUR/USD Euro versus the US dollar
NZD/USD New Zealand dollar versus the US dollar
USD/CAD US dollar versus Canadian dollar
USD/CHF US dollar versus Swiss franc
GBP/USD Sterling versus US dollar
AUD/USD Australian dollar versus US dollar
USD/JPY US dollar versus Japanese yen
Now, there are some things that need to be discussed about the ' majors currency pairs '
Firstly, many of the major currency pairs are linked in its prices movement, that mean they move completely identical to each other. For example, the Euro versus the US dollar and the pound sterling versus the US dollar tend to move in the same direction (not exactly),
And the pound sterling against the US dollar is usually more volatile than the EUR /USD, but if the euro against the US dollar on a clear upward or falling trend, you can safely assume that the pound sterling versus US dollar will go in the same direction, so it could be argued that they are linked with each other in a positive manner.
On the other hand, the pair USD/CHF is linked in reverse with the EUR/USD, so, if the euro versus the US dollar up, it probably the US dollar versus the Swiss franc will move down.
You will notice in the chart for the EUR against USD and the graph of the pair USD/CHF in the same time frame, you will notice the clearly they are related inversely, and that means that If one of the spouses in the upward trend, the other is in the downward trend.
so, What means that relation for you? This means that you should be careful when making your trading decisions to avoid doubling the risk for trades, For example, if you make a purchase order for EUR/USD, GBP/USD pair, you are doubling the risk trades, plus it is totally useless to do trading couple together at the same time. so you have to choose either trading on one pair or the other one.
I have also found that the pair USD/CHF is more volatile compared to the pair EUR/USD, GBP/USD, and rarely do I personally trading in the USD/CHF due to its volatility.
Usually, I focus my attention on trading in the euro versus the US dollar and British pound against the dollar. This does not mean that you should never trade with u.s. dollar versus the Swiss franc, but I want to tell you, only through my previous experience, that trading in the euro versus the u.s. dollar and the pound sterling versus the dollar provide better trading opportunities.
The EUR/USD currency pair is the most widely traded in the Forex market, so it carries a higher trading volume than other currencies. This means that it is the most liquid, this is another reason behind the preference for trading this pair. The pair euro against the US dollar represents about 27% of the trading volume in the currency market as a whole, followed by the US dollar against the Japanese yen by 13%, followed by the pound sterling against the US dollar by 12% of the total volume of trading in the Forex market.
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| Major currency pairs |
Major currency pairs
major currency pairs are the currencies of major powers associated with the US dollar. And add also gold and silver because it is priced in the US dollar and traded regularly.EUR/USD Euro versus the US dollar
NZD/USD New Zealand dollar versus the US dollar
USD/CAD US dollar versus Canadian dollar
USD/CHF US dollar versus Swiss franc
GBP/USD Sterling versus US dollar
AUD/USD Australian dollar versus US dollar
USD/JPY US dollar versus Japanese yen
Now, there are some things that need to be discussed about the ' majors currency pairs '
Firstly, many of the major currency pairs are linked in its prices movement, that mean they move completely identical to each other. For example, the Euro versus the US dollar and the pound sterling versus the US dollar tend to move in the same direction (not exactly),
And the pound sterling against the US dollar is usually more volatile than the EUR /USD, but if the euro against the US dollar on a clear upward or falling trend, you can safely assume that the pound sterling versus US dollar will go in the same direction, so it could be argued that they are linked with each other in a positive manner.
On the other hand, the pair USD/CHF is linked in reverse with the EUR/USD, so, if the euro versus the US dollar up, it probably the US dollar versus the Swiss franc will move down.
You will notice in the chart for the EUR against USD and the graph of the pair USD/CHF in the same time frame, you will notice the clearly they are related inversely, and that means that If one of the spouses in the upward trend, the other is in the downward trend.
so, What means that relation for you? This means that you should be careful when making your trading decisions to avoid doubling the risk for trades, For example, if you make a purchase order for EUR/USD, GBP/USD pair, you are doubling the risk trades, plus it is totally useless to do trading couple together at the same time. so you have to choose either trading on one pair or the other one.
I have also found that the pair USD/CHF is more volatile compared to the pair EUR/USD, GBP/USD, and rarely do I personally trading in the USD/CHF due to its volatility.
Usually, I focus my attention on trading in the euro versus the US dollar and British pound against the dollar. This does not mean that you should never trade with u.s. dollar versus the Swiss franc, but I want to tell you, only through my previous experience, that trading in the euro versus the u.s. dollar and the pound sterling versus the dollar provide better trading opportunities.
The EUR/USD currency pair is the most widely traded in the Forex market, so it carries a higher trading volume than other currencies. This means that it is the most liquid, this is another reason behind the preference for trading this pair. The pair euro against the US dollar represents about 27% of the trading volume in the currency market as a whole, followed by the US dollar against the Japanese yen by 13%, followed by the pound sterling against the US dollar by 12% of the total volume of trading in the Forex market.