Here is a guide to help you decide the best currency to trade in forex.
The first currency in the pair is known as the “base,” while the second is the “quote.” The forex price is the amount of quote currency it takes to buy 1 unit of the base currency.
For example, AUD/USD 0.67 means you can buy 1 unit of AUD ($1 Australian) with 0.67 of the quote currency ($0.67 US).
What are the major forex pairs? Major pairs are among the most widely traded pairs on the global market, as they are tied to the US dollar. Minor pairs involve currencies outside the USD, while exotic pairs are currencies from smaller countries paired with major currencies.
Swing traders and those seeking range breakouts typically think that the best forex pairs to trade experience wide price changes. Still, you should only execute trades you are comfortable with and that align with your investment strategy.
EUR/USD and GBP/USD
Opportunities for scalping and swing trading during the day. However, their high trading volume and other economic factors can spike prices.
Modest profit opportunities and less volatility. Often noted as the best forex pairs to scalp as the pair changes direction at well-defined support and resistance levels.
AUD/USD and NZD/USD
Sense of familiarity to traders in Australia, New Zealand and the US. Access to economic news can also make it easy to predict pricing.
Cross pairs (major currencies aside from the USD, such as EUR/GBP)
Known for their predictability following economic news and events.
Yen pairs (e.g. CAD/JPY, CHF/JPY and GBP/JPY)
Can be predictable based on economic events. For example, energy prices strongly influence CAD/JPY.
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