What Are the Best Forex Pairs in Trading?

What Are the Major Forex Pairs?

Forex trading is all about trading currency pairs, where two different currencies are exchanged based on how much one is worth compared to the other—kind of like when you swap your money for local currency while traveling.

The Majors are some of the most traded currency pairs in the world. These include the US Dollar (USD) paired with other major global currencies like the Euro (EUR), Japanese Yen (JPY), and British Pound (GBP). These pairs are popular due to their liquidity, low transaction costs, and high trading volume.

List of Major Currency Pairs

Let’s take a closer look at some of the most traded forex pairs. If you click on the links you can see the relevant price chart.

The Four Major Currency Pairs

When people talk about the "four majors" in forex, they’re referring to the currency pairs that see the most trading action. Why? Simple: these pairs have high liquidity and low spreads, making them popular with traders around the globe. The four majors are EUR/USD, USD/JPY, GBP/USD, and USD/CHF, and each has its own personality, shaped by the economic forces behind them.

Trading EUR/USD

If there’s a superstar pair in forex, it’s EUR/USD. It’s the most traded pair, with tons of buying and selling every day. This popularity brings narrower spreads, which is great news for traders. The pair reflects the strength of the Eurozone and the U.S. economies and is driven by factors like:

• Policy decisions from the European Central Bank (ECB) and the Federal Reserve
• Economic data, including GDP growth, inflation rates, and employment figures
• Major political events in either the Eurozone or the U.S.

Trading USD/JPY

The USD/JPY pair is a favorite among traders, largely because of Japan’s economic influence and the yen’s reputation as a safe-haven currency. This pair tends to move in response to:

• The Bank of Japan’s policies, especially any interest rate changes
• The overall health of the Japanese and U.S. economies
• Global risk sentiment, as the yen often gains strength during periods of uncertainty

Trading GBP/USD

Often referred to as “Cable,” GBP/USD is known for its volatility and quick reactions to news from both the U.K. and the U.S. Key influences on this pair include:

• Interest rate moves from the Bank of England and the Federal Reserve
• Developments related to Brexit and U.K. trade policy
• Economic indicators, such as retail sales and inflation data

Trading USD/CHF

USD/CHF, also known as the “Swissie,” links the U.S. dollar with the Swiss franc, a currency famed for its stability. Switzerland’s strong economy and its safe-haven reputation make this pair unique. USD/CHF tends to be impacted by:

• Policies and rate changes from the Swiss National Bank (SNB)
• Global economic uncertainties, which often drive demand for the franc
• Trade and economic data involving Switzerland and the U.S.

Each of these pairs offers its own set of trading opportunities, depending on what’s happening in their respective economies and the broader market. If you’re trading these, keep an eye on the news and central bank moves—they can make all the difference!

Commodity Currencies

Commodity currencies—like AUD/USD, USD/CAD, and NZD/USD—are linked to the ups and downs of commodity prices, such as oil, gold, and dairy. They’re sometimes considered a bit riskier to trade, but they do open the door to some unique opportunities tied to commodity-driven economies.

Trading AUD/USD

When trading the AUD/USD pair, you’re essentially looking at the Australian dollar against the U.S. dollar. Australia’s economy leans heavily on its export of commodities like iron ore, coal, and natural gas, so this pair is especially responsive to:

• Changes in the prices of key exports, especially minerals and metals
• Australia’s trade relationship with China, a major consumer of Aussie resources
• Economic data from Australia and policy moves from the Reserve Bank of Australia (RBA)

Trading USD/CAD

Known as the “loonie,” the USD/CAD pair links the U.S. dollar with the Canadian dollar. Canada is a big player in the oil industry, so movements in this pair often track with oil price trends. Other factors to watch include:

• Oil price shifts, given Canada’s role as a major oil exporter
• Trade relations between the U.S. and Canada, along with economic data
• Interest rate decisions from the Bank of Canada and the Federal Reserve

Trading NZD/USD

The NZD/USD pair reflects the relationship between the New Zealand dollar and the U.S. dollar. New Zealand’s economy is grounded in agricultural exports, especially dairy. Key factors affecting this pair include:

• Prices of dairy and other agricultural goods on the global market
• Trade relations with both the U.S. and China
• New Zealand’s economic policies and any interest rate changes from its central bank

Cross Currencies

Cross currency pairs, like EUR/GBP, EUR/CHF, and EUR/JPY, don’t involve the U.S. dollar. Instead, they give traders a way to tap into specific regional economies and offer new angles for trading strategies.

Trading GBP/EUR

The EUR/GBP pair shows how the Euro stacks up against the British pound. This pair is actively traded during European hours and tends to respond to:

• Economic indicators from the U.K. and the Eurozone, like GDP and inflation
• Major political events, especially anything related to Brexit
• Interest rate and policy decisions from the ECB and the Bank of England

Trading EUR/CHF

For those looking for stability, EUR/CHF can be an interesting choice, since both Europe and Switzerland have relatively steady economies. Factors influencing this pair include:

• Switzerland’s economic health and its reputation as a safe haven
• Economic developments within the Eurozone
• Policy shifts from the ECB and the Swiss National Bank, as the Swiss franc often appreciates during uncertain times

Trading EUR/JPY

The EUR/JPY pair links the euro with the Japanese yen, offering a look into both European and Asian markets. This pair usually reacts to:

• Economic data from Europe and Japan
• Global market sentiment, with the yen often gaining strength during “risk-off” periods
• Monetary policy changes from the ECB and the Bank of Japan

Each of these currency pairs has its own character, shaped by the economies they represent. Whether you’re into commodities or looking for cross-currency opportunities, there’s plenty of room to find your own trading style!

How Are Currency Pairs Calculated?

Knowing how currency pairs are calculated can give you a real edge in trading. A good grasp of the basics—like pip value, margin, leverage, and position size—helps you plan smarter trades and stay in control. Let’s break it down.

Pip Price

Ever heard someone mention “pips” in forex? It’s just the smallest unit of price movement for most currency pairs, usually 0.0001 (or 0.01 if you’re trading with the yen). These tiny moves can actually add up, especially in bigger trades. Understanding pip value lets you get a clear picture of potential profits and losses for each trade. For example, in a standard lot (100,000 units), each pip in a USD-based pair might be worth $10. If calculating pips makes your head spin, try our pip value calculator. It does the math for you, so you’re free to focus on the strategy.

Margin and Leverage

Margin and leverage can make a huge difference in how you trade. Margin is simply the bit of money you put down to open a trade, while leverage lets you “borrow” against your margin to control a bigger position. For instance, with 1:100 leverage, you can make a $10,000 trade with only $100 of your own cash. It’s a powerful tool—leverage can boost your profits but also magnify losses, so it’s all about balance. Used wisely, it can help you make the most of your capital. But as with most things in trading, moderation is key.

Position Size

Figuring out your position size is one of the best ways to keep risk under control. It’s like setting limits on how much you’re willing to bet on each trade. A general rule is to risk no more than 1-2% of your account per trade. So, if you have $5,000 in your account, that means risking $50 to $100 max on any one trade. It may seem small, but it keeps your losses manageable and helps you stay in the game. Not sure how to calculate the right size? Our position size calculator makes it quick and easy, so you can focus on the big picture without getting bogged down in the numbers.

How to Trade Major Forex Pairs

Trading the major forex pairs—like EUR/USD, USD/JPY, GBP/USD, and USD/CHF—isn’t just about watching price charts. Successful trading means understanding what’s moving these currencies, staying up-to-date on economic news, and following some basic risk management rules. Here are a few ideas to get you started.

Keeping up with the latest news is key, especially from countries backing the currencies you’re trading. For instance, with the EUR/USD (euro vs dollar), it’s a good idea to track those major updates from the Eurozone and the U.S., which can include any changes in interest rates, GDP figures, inflation data, or jobs reports. Central banks, like the ECB, the Fed, the Bank of Japan, and the Bank of England, can also impact currency movements, so knowing their policies can give you a heads up about major moves before they even happen.

Good risk management is just as important as following the news. So, setting clear stop-loss and take-profit levels before entering a trade can help you stay disciplined and avoid emotional decisions. If you’re new to forex or want a safe place to practice, try out Dukascopy Bank’s forex demo account. It lets you trade with real-time data and live charts, so you can try things out without risking actual money.

Trading major pairs is all about getting the basics right, keeping up with the news, and learning as you go.

Trading Forex Majors at Dukascopy

Ready to start trading forex majors?

Dukascopy has everything you need to trade confidently, whether you’re a newbie or a seasoned trader.

Here’s what makes trading the majors with Dukascopy so straightforward.

1. Real-Time Forex Charts: Want to keep tabs on popular pairs like EUR/USD or USD/JPY? Dukascopy’s live charts let you track every price movement as it happens, so you’re always in the know. Check out the latest action on your favorite pairs whenever you want!

   

2. Low Costs, High Liquidity: One of the best perks of trading the majors is low transaction fees, thanks to tighter spreads. Dukascopy offers competitive rates on high-volume pairs like EUR/USD and GBP/USD, so more of your money stays in play.

3. Risk-Free Practice with Demo Accounts: Not quite ready to go live with real cash? No problem—Dukascopy’s demo account lets you practice your trades with virtual money, so you can get a feel for the platform in a totally risk-free environment.

4. Mobile App for Trading On-the-Go: Don’t want to miss out on opportunities when you’re away from your computer? With the Dukascopy app, you can trade, track positions, and check news right from your phone, no matter where you are.

Dukascopy is designed to help you get comfortable at every level, with tools and resources that make trading feel straightforward.

Steps to Start Trading Forex Majors

Here’s a step by step guide to start trading the Forex Majors at Dukascopy.

Step 1: Open an Account

First things first—set up your Dukascopy account. If you want to practice first with virtual funds then you can start with a demo account and then switch to a live account once you feel ready to trade with real money.

Step 2: Pick a Currency Pair

It’s a good idea to start with just one pair, for instance the EUR/USD or USD/JPY. If you focus on a major pair then you’ll have lots of resources to learn from, plus these pairs have high liquidity, making them easier to trade and also lower spreads.

Step 3: Analyze the Market

It is worth taking a little time to analyze the market as it can help you make better trading decisions. You can try technical analysis (think charts and indicators) or fundamental analysis (following news and economic updates).

Dukascopy has tools for both, so you can experiment and see what feels right.

Step 4: Set a Strategy

Pick a trading strategy that fits your style. If you like taking your time, trend-following might be up your alley. If you prefer in and out fast-paced trading, then consider scalping. There’s no one-size-fits-all, so just go with what feels comfortable.

Step 5: Place Your Trade

Once you’re ready, then it’s time to place your trade. Decide whether you think the currency will go up (buy) or down (sell), and then execute your trade.

Step 6: Manage Your Risk

Good risk management can help you protect your money. The idea is to protect your margin and stretch your capital. Tools like stop-loss and take-profit orders can help you set boundaries on potential losses, so you don’t risk more than you’re comfortable with.

Step 7: Review and Adjust

After a few trades, take a moment to breathe. Take a step back to see what worked and what didn’t. Trading is all about learning and improving, and each trade gives you a chance to refine your strategy.

Simple Strategies for Trading Forex Majors

Let’s talk strategy! Here are some popular trading styles to try out on the major forex pairs.

1. Trend Following

“Follow the trend” and “the trend is your friend” are both popular sayings for a reason! Trend-following means trading in the direction of the market’s current flow. For instance, if the EUR/USD is trending up, you may look to buy rather than sell. Dukascopy’s trend indicators, like moving averages, make it easier to spot these trends.

1. Range Trading

Some currency pairs don’t follow a clear trend but instead bounce between a high and a low price. This is called range trading. You buy near the low (support level) and sell near the high (resistance level). USD/CHF often behaves this way, so it’s a good pair to try this approach on.

1. Breakout Trading

Breakout trading is all about catching a price move when it “breaks out” of its usual range. This often happens after big news events. So basically, you set an entry order just outside the range, and if the price breaks through, you're in play! It’s a fun strategy that can be exciting, especially when major economic announcements are expected. Again remember that all strategies come with risk and you never want to trade with more than you can afford to lose.

1. Scalping

If quick trades are your thing, scalping could be a good fit. Scalping means making fast, small trades to take advantage of tiny price changes. It works well with highly liquid pairs like EUR/USD. Keep in mind, though—scalping requires focus, so make sure you’re ready to keep a close eye on the action.

1. Fundamental Analysis

It’s also called trading the news and if you enjoy following the news and understanding how it could impact the markets then fundamental analysis could be your style. Basically, you make trades based on economic data and global events. For example, if the U.S. announces an interest rate hike, it might strengthen the USD, creating trading opportunities in pairs like USD/JPY. With Dukascopy’s market watch and analysis tools, you can stay updated on all the key events.

And there you go! With these steps and strategies, you’re ready to start exploring the forex majors. Whether you’re trading EUR/USD, USD/JPY, or AUD/USD, remember—it’s all about taking it one step at a time. Start with a demo, practice, and build your confidence. The forex market will always be there, and Dukascopy has everything you need to start trading with confidence.

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