When trading Forex markets, you will come across a great pool of Forex pairs to choose from. They are grouped in three general categories: Majors, Minors, and Exotics.
Major pair definition
Major currencies have the highest trading volume and are widely accepted as the world’s main currencies by investors. Major currency pairs consist of major base and major quote currencies.
Why is understanding Major pairs important for traders?
- Major currencies are the most liquid and offer the tightest spreads.
- There is a wide range of information available for conducting analysis on major pairs.
- Major currencies are the most stable, offering less volatility and less risk.
- Major currency pairs are the most traded ones and most trading signals are based on them. If you are planning to trade using signals, learning about what they are and how they work is important.
Thorough Major pair Explanation
A currency pair is made of two currencies. One currency is valued in relation to the other. The first currency in the pair is referred to as base currency. The second is referred to as a quote currency. Major currency pairs are made of the world’s major, most traded currencies. Usually, one part in a Major pair is the US Dollar. It’s a well-known fact that Euro vs US Dollar is the most exchanged Major currency pair in the world. As a result, the difference between the bid and the ask price is the smallest on that pair. High liquidity makes major pairs attractive for investors as the spreads offered to get very tight. In addition, major currencies are from developed nations and economies. And therefore, the information is abandoned on the internet. Central banks are constantly updating the relevant information needed to conduct fundamental analysis. Information such as unemployment rates, Inflation, Interest rates decisions, and more are vital in making the sense of where future prices can go. The information provided by these markets are not only timely and regular, they are also very trustworthy.
The list of major Forex currencies includes: EUR, USD, GBP, JPY, CHF, CAD, AUD, NZD, and the currency pairs that are made out of them are called Major currency pairs. Just keep in mind that one part is generally the US Dollar.
Example of Major pairs in Forex
There are a couple of good reasons why most traders choose major currencies to trade. As already mentioned, they are the most liquid, offering tight spreads, stable and there’s a good amount of quality information available on the internet for conducting an analysis.
You can see the list of most traded Major currency pairs below.
- EUR/USD – Euro vs US Dollar
- GBP/USD – British Pound vs US Dollar
- USD/CHF – US Dollar vs Swiss Franc
- USD/JPY – US Dollar vs Japanese Yen
- USD/CAD – US Dollar vs Canadian Dollar
- AUD/USD – Australian Dollar vs US Dollar
- NZD/USD – New Zealand Dollar vs US Dollar
FAQs on Major pairs in Trading
What are the 7 major forex pairs?
The list of 7 Major currency pairs include:
- EUR/USD – Euro vs US Dollar
- GBP/USD – British Pound vs US Dollar
- USD/CHF – US Dollar vs Swiss Franc
- USD/JPY – US Dollar vs Japanese Yen
- USD/CAD – US Dollar vs Canadian Dollar
- AUD/USD – Australian Dollar vs US Dollar
- NZD/USD – New Zealand Dollar vs US Dollar
What is the easiest forex pair to trade?
The easiest Forex pair to trade is EUR/USD. The reason behind this is that the pair is the most liquid. At any given moment, there are a lot of investors buying and selling this pair. As a result the difference between the bid and the ask price is the smallest, which in turn translates into smaller trading fees.