Major currency pairs in Forex Trading

The US dollar serves as the one of the currency for the seven most liquid pairs traded in forex.First fours are the major pairs followed by three commodity pairs. Pairs that include the Euro as also referred to as the currency crosses as the EUR/GBP, EUR/JPY, and EUR/CHF etc.

Let’s see how the four major pairs fare.
EUR/USD
GBP/USD
USD/JPY
USD/CHF





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Trading the EUR/USD
The pair is both days traded and swing traded. Since the pair is one of the strongest, advances as well as the new traders invest in it.


Trading decision can be based on analyzing and applying Technical and Fundamental news from the Euro and Us zone. Unexpected economic news release can drive the pair to further ahead in a single direction without any retracements.
Another point to be considered is the comparison between the EUR/USD and USD/CHF.
Euro-USD is mostly inversely correlated to USD/CHF, thus comparing charts for both help in future movement predictions. To illustrate- the EUR/USD is likely to break under the support level if, the USD/CHF breaks above a significant resistance level and the euro USD doesn’t break support level. In a way, USD/CHF seems to escort the movement of EUR/USD.


Trading the GBP/USD
This is third most traded pair in forex. And also one of the most volatile. Novice traders are not advised to trade in this pair until some experience is gained.

News from the UK and US zone assists making trading decision for this pair. The pair is prone to false breakouts. Other factors that affect the pound are, firstly, the difference between the interest rates of the Federal Reserve and the Bank of England. Secondly, high growth in the UK can push the pound further.



Trading the USD/JPY
This pair accounts for the second most traded pair in forex. News from the Asian zone is crucial to make related trading decisions. The USD/JPY often sees sustained breakouts.
Other factors that affect the pair can be the difference of interest rates of the Federal Reserve and the bank of Japan. Any interference of the Japanese government to strengthen the Yen, can worsen the pair



Trading the USD/CHF
It is least traded major pair. As mentioned above this pair is negatively related to EUR/USD.
Traders with moderate experience and of course the learned traders can trade in this pair.
Trading news from US and CHF is relevant. USD/CHF pulls through the geopolitical volatility. Also global stability will mark further movement in this pair.

Most of the pairs are both swing and day traded. While the average spread varies between 2-4 pips for EUR/USD and USD/JPY, for GBP/USD and USD/CHF its 4-5 pips.
Next post sees the personality traits of the commodity pairs.