Top 5 Forex Pairs To Trade

December 7, 2022

The forex market opens 24 hours daily, from Sunday evening to Friday night. This helps traders take advantage of the international time zones of New York, London, and Tokyo. This makes it easy for traders to close and open positions any time of the day without worrying about time restrictions, which are common in other markets. To start trading in forex, you must understand the common currency pairs traded in the forex market. 

The forex market opens 24 hours daily, from Sunday evening to Friday night. This helps traders take advantage of the international time zones of New York, London, and Tokyo. This makes it easy for traders to close and open positions any time of the day without worrying about time restrictions, which are common in other markets. To start trading in forex, you must understand the common currency pairs traded in the forex market. 


Types Of Currency Pairs To Trade 

Forex trade currency pairs are divided into three categories that include:


These are the most popular currency pairs to trade. Majors always include the US dollar and generally have higher liquidity. That means a trader has the highest chance to trade that pair than others. Since majors have the highest liquidity, they are generally easier to research, which means only one thing; it is a crowded and competitive market that not everyone can hack.  


Minor currency pairs don’t typically include the US dollar. They, however, do include other major global currencies like the euro. These have lower liquidity, and generally, there is less available data on them. Trading minors is, therefore, a less competitive market that any trader can take advantage of.


Crosses are any currency pairs that don’t include the US dollar but differ from minors. How? Minors include one of the major currencies like the euro, but a cross is made up of any non-US dollar currency. That means that a minor, in a way, is a type of cross. 


Most Popular Forex Pairs To Trade

The US dollar is the world’s most popularly traded currency. Because of that, most major currency pairs include the USD as either the base or quote currency. Combined with currencies from the world’s biggest economies like the United Kingdom, China, and Japan, they are seen as major crosses. Major currency pairs are attractive to many forex traders as they represent the most stable and prosperous world economies. They have low spreads, which traders take advantage of since it accurately represents the market value. The most popular currency pairs include the following: 



This is the most popular forex trading pair. It has the lowest spread among modern forex brokers and is not too volatile. The euro represents the European Union. It is a stable currency and an official currency in 19 of the 28 member countries of the EU. The EUR/USD pair is usually influenced by political movements that affect either the euro or the dollar in relation to the other. 

The good news is that if you are a trader who doesn’t like taking too much risk, this is one of the safest options for forex trading. Additionally, given the popularity of the EUR/USD, there is so much information online to help you avoid common mistakes beginner forex traders make. Here’s the thing: most of the time, the EUR/USD pair has a positive correlation with the GBP/USD and a negative correlation with USD/CHF. This is mainly due to the positive correlation between the euro, the British pound, and the Swiss franc. 



Referred to as trading the “gopher,” the USD/JPY is among the major traded pairs in the world. The Japanese yen (JPY) is the currency of Japan and dates back to the Meiji restoration’s attempt to modernize and westernize the Japanese economy. By the end of World War II, the yen lost its value but slowly began to stabilize, mainly due to the 1971 oil crisis. Today, the yen is held as a reserve currency after the USD, euro, and GBP. 

The JPY is said to be held under a “dirty float” authority because of Japan’s policy of active stability intervention. That means that its value goes through many daily fluctuations. However, the central banks of Japan are constantly buying and selling the currency in groups to keep the exchange rates under control. If you trade in forex, you can create large profits in the USD/JPY pair by capitalizing on the daily fluctuations if you can buy in at the right time. 



Trading in this currency pair is popularly referred to as trading the “cable.” 

The British pound sterling (GBP) is the United Kingdom’s official currency used in England, Wales, and Scotland. Despite being an official member of the EU until 2016, the United Kingdom never switched to the euro like most of the other EU member countries. The GBP is the third most traded currency, trailing behind the USD and the EUR. Two significant events have influenced the price of the GBP in the last decade. From 2007 to 2008, the GBP price fluctuated due to the worldwide influence of the Great Recession.

In 2007, the British pound sterling reached an all-time high, trading at £2.10 per $1. However, this didn’t last long as it shockingly crashed to a low of £1.40 per $1 the following year. This caused many investors to cash out their pounds in exchange for the USD. Although the pound recovered in the coming year, it never again reached the high of 2007. 

Brexit, the term given to the 2016 vote to separate Britain from the EU, would again influence the price of the GBP. Brexit led to the GBP losing its value by almost 10% overnight and 20% in the months that followed after the infamous vote. Investors again abandoned the pound from more stable currencies in the wake of the negotiations. 

Ideally, the GBP/USD pair has a negative correlation with currency pairs like the USD/CHF and a positive correlation with the EUR/USD, mainly because of the positive correlation between the GBP, Swiss franc, and the euro. 



Trading in the AUD/USD pair is popularly referred to as trading the “Aussie.” The Australian dollar is Australia’s official currency and the sixth most commonly traded currency pair. The AUD is intrinsically correlated with the commodities market since Australia is one of the world’s top iron and coal exporters. The commodity slump of 2015 saw the AUD reach a low point never seen since the 1970s. 

The currency pair negatively correlates with the USD/JPY, USD/CHF, and USD/CAD. This is because the US dollar is mostly the quote currency in such cases. The correlation with the USD/CAD is mainly because the Canadian and Australian dollars share a positive correlation since they are both commodity block currencies. If you are considering holding AUD, you need to pay attention to the prices of the commodities crucial to the Australian economy.  



Trading the “loonie” is the process of trading in the USD/CAD pair. Canada, America’s fiscal neighbor to the north and among the most crucial trading partners, shouldn’t come as a surprise that the value of the USD and CAD are closely related. The value of the CAD is also heavily correlated with commodity prices.

For instance, oil prices have a lot of influence over the value of the Canadian dollar since Canada’s economy relies heavily on oil exportation. In 2016 when the oil prices fell to prices not seen in more than a decade, the Canadian dollar slumped to one of the lowest exchange rates of 1.46 CAD to 1 USD. If you want to trade in the USD/CAD pair, keep an eye on the oil prices to determine the right time to buy. Ideally, the USD/CAD pair negatively correlates with the EUR/USD, GBP/USD, and AUD/USD pairs since the US dollar is used as the quote currency.


🌟Bonus: USD/CHF🌟

The Swiss Franc (CHF) is the currency of Switzerland, one of the world’s highly-developed and most advanced free-market economies. Despite this, those who invest in CHF do that to protect their assets in case of turbulence. The Swiss Franc is considered by many investors a “safe-haven” currency. That means that in the event of volatility, the CFH will appreciate while other currencies lose value. 

The opposite end of that spectrum means that the CHF will lose value when other currencies appreciate. During the Great Recession, for instance, the Swiss Franc appreciated against every other currency except the Japanese Yen. That’s why the CHF and JPY are the most popularly traded safe haven currencies, thanks to their low volatility in the event of significant market movements.




Forex trade is influenced by many factors within the world’s largest economies. If you are to trade in some of the most commonly traded currency pairs, you must do your due diligence. The value of these currencies will be influenced by the movement of commodities like oil and the current political climate, like in the case of Brexit. Luckily, there is so much information online to help you make the best decision. 


Disclaimer : This is not trading or investment advice. The above article is for educational purposes only. Please do your own research before purchasing or investing in any cryptocurrency.

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