Forex trading involves buying and selling currencies in order to make a profit. The foreign exchange market is the largest financial market in the world, with an estimated daily trading volume of over $5 trillion. One of the most important factors to consider when trading forex is the selection of currency pairs. Forex traders trade in pairs, and there are many different currency pairs to choose from. In this article, we will discuss what are major forex pairs.
Major forex pairs are the most actively traded currency pairs in the forex market. These pairs are considered to be the most liquid and have the highest trading volume. The major forex pairs consist of currencies from the world’s most developed economies, including the United States, Japan, the Eurozone, the United Kingdom, Switzerland, Canada, and Australia.
The most commonly traded major forex pairs include the EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, and USD/CAD. Let’s take a closer look at each of these pairs.
1. EUR/USD
The EUR/USD is the most traded currency pair in the forex market. It represents the euro currency against the US dollar. The euro is the currency of the European Union, while the US dollar is the currency of the United States. This currency pair is often referred to as the “euro” or “fiber” in forex trading jargon.
2. USD/JPY
The USD/JPY is the second most traded currency pair in the forex market. It represents the US dollar against the Japanese yen. The yen is the currency of Japan, and the currency is known for its volatility.
3. GBP/USD
The GBP/USD is the third most traded currency pair in the forex market. It represents the British pound against the US dollar. The pound is the currency of the United Kingdom, while the US dollar is the currency of the United States.
4. USD/CHF
The USD/CHF is the fourth most traded currency pair in the forex market. It represents the US dollar against the Swiss franc. The Swiss franc is the currency of Switzerland, and the currency is known for its stability and safety.
5. AUD/USD
The AUD/USD is the fifth most traded currency pair in the forex market. It represents the Australian dollar against the US dollar. The Australian dollar is the currency of Australia and is often referred to as the “aussie.”
6. USD/CAD
The USD/CAD is the sixth most traded currency pair in the forex market. It represents the US dollar against the Canadian dollar. The Canadian dollar is the currency of Canada and is often referred to as the “loonie.”
Why are major forex pairs important?
Major forex pairs are important because they are the most actively traded currency pairs in the forex market. They are also the most liquid, meaning that there is a lot of buying and selling activity in these pairs. This makes it easier for traders to enter and exit trades quickly and at the best possible prices.
Major forex pairs are also important because they are closely watched by traders, analysts, and investors. Economic news and events that impact these currencies can have a significant impact on the forex market as a whole. This means that traders who are trading major forex pairs need to be aware of global economic and political events that can impact these currencies.
Conclusion
Major forex pairs are the most actively traded currency pairs in the forex market. They are important because they are the most liquid and closely watched by traders, analysts, and investors. The most commonly traded major forex pairs include the EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, and USD/CAD. Traders who are trading major forex pairs need to be aware of global economic and political events that can impact these currencies.
