Along with identifying the most popular trading windows to time forex trades, it’s also helpful to be aware of the most popular currency pairs that will be regularly traded among global forex traders. The more familiar you are with these popular currency pairs, the more effectively you’ll be able to consider them in your trading strategy, and understand their price activity in relation to other pairings on the market.
Some of the most popular currency pairs include:
- EUR/USD. By volume, this is the most popular forex pairing, and the currencies involved represent the two largest economies in the world. Its sheer size and liquidity makes EUR/USD more stable than other currency pairs with lower liquidity, which makes it a popular safe-haven pairing when traders are looking to move funds out of volatile positions.
- USD/JPY. For traders seeking a safe-haven pairing that has a foothold in the eastern economies, USD/JPY is a great choice. Like EUR/USD, it offers good liquidity and stability, and can be more insulated from economic events occurring in western economies. At the same time, its location in Asia can make this pairing more influenced by economic news and events taking place in eastern countries.
- GBP/USD. While GBP/USD has always been a major currency pair in terms of popularity, volume and the economies the currencies represent, Great Britain’s exit from the European Union has separated the British Pound a little bit more from the Euro, which has increased its volatility but also created opportunities for diversification and profit-seeking.
- EUR/GBP. Although this is a minor currency pair due to the absence of USD, EUR/GBP is still important and potentially lucrative for traders, especially in light of Brexit and the increased economic separation between these currencies. Political and economic rifts between Great Britain and Europe have increased volatility and trading volume for this currency pair, which can be attractive to traders looking to time positions around evolving news and events.
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