Forex Ranks: The Top 10 Currency Pairs to Trade in 2021
The forex market is the largest and most liquid financial market in the world, with trillions of dollars being traded daily. For traders looking to enter this exciting market, it is important to choose the right currency pairs to trade. In this article, we will discuss the top 10 currency pairs to trade in 2021 based on their liquidity, volatility, and potential for profit.
1. EUR/USD: The Euro to US Dollar pair is the most traded currency pair in the forex market. It represents the two largest economies in the world, making it highly liquid and less volatile compared to other pairs. Traders can benefit from tight spreads and consistent market movements.
2. GBP/USD: The British Pound to US Dollar pair is also highly popular among traders. It is influenced by economic data, political events, and Brexit negotiations. This pair offers good trading opportunities with high volatility and liquidity.
3. USD/JPY: The US Dollar to Japanese Yen pair is known as the “Gopher” and is favored by many traders due to the Bank of Japan’s monetary policy and the relationship between the US and Japanese economies. It is an ideal pair for day traders looking for short-term opportunities.
4. USD/CAD: The US Dollar to Canadian Dollar pair is heavily influenced by oil prices and economic data from both countries. Traders can take advantage of the correlation between the US Dollar and oil prices, making it an attractive pair for commodity traders.
5. AUD/USD: The Australian Dollar to US Dollar pair is influenced by commodity prices, interest rate differentials, and economic data from both countries. It offers good trading opportunities due to its high volatility and liquidity.
6. USD/CHF: The US Dollar to Swiss Franc pair is known as the “Swissie” and is considered a safe haven currency. It is influenced by economic data from Switzerland and risk sentiment in the global markets. Traders can benefit from its low volatility and strong trends.
7. EUR/JPY: The Euro to Japanese Yen pair is popular among traders due to its volatility and liquidity. It is influenced by economic data from the Eurozone and Japan, making it an ideal pair for those who understand the relationship between these economies.
8. GBP/JPY: The British Pound to Japanese Yen pair is highly volatile and offers good trading opportunities. It is influenced by economic data from both countries, as well as political events and risk sentiment. Traders should be cautious due to its high volatility.
9. EUR/GBP: The Euro to British Pound pair is influenced by economic data from the Eurozone and the UK, as well as Brexit negotiations. It offers good trading opportunities due to its volatility and liquidity.
10. NZD/USD: The New Zealand Dollar to US Dollar pair is influenced by economic data from both countries and commodity prices. Traders can benefit from its high volatility and liquidity.
When trading these currency pairs, it is important to consider the current market conditions, economic data releases, and geopolitical events that may impact their movements. Additionally, traders should use technical analysis tools and indicators to identify potential entry and exit points.
In conclusion, the top 10 currency pairs to trade in 2021 offer a mix of liquidity, volatility, and potential for profit. Traders should focus on pairs that align with their trading strategies and risk appetite. By staying informed and using effective trading techniques, traders can capitalize on the opportunities presented by these currency pairs.