Best Currency Pair To Trade in 2024

The forex market is the largest and most volatile market in the world, offering trading in hundreds of different currency pairs. If you’re looking for the best currency pairs to trade, we’ve got you covered. We have compiled a list of the top four most actively traded currency pairs on the forex market. When you use FundYourFX, you will have access to these four major currency pairings for trading.

#1 EUR/USD

EUR/USD is a currency pair consisting of the euro and the US dollar. It is one of the world’s most widely traded currency pairs and is highly liquid, making it easy to buy and sell. The price of EUR/USD depends on the relative value between the euro and the US dollar, which is influenced by various economic, political, and financial factors. Forex traders can buy or sell EUR/USD depending on whether they think the euro’s value will increase or decrease against the US dollar.

Is EUR/USD A Good Pair To Trade?

EUR/USD is a widely traded currency pair and is considered one of the major pairs in the forex market. Trading EUR/USD can be a good choice for traders due to its high liquidity, which means that it is easy to enter and exit trades, and tight spreads, which are the difference between the bid and ask prices of a currency pair.

What Is The Best Time to Trade EUR/USD?

One of the best times to trade EUR/USD is during the overlap of the European and North American trading sessions, which occurs between 8:00 AM and 12:00 PM EST (1:00 PM to 5:00 PM GMT). This is when financial centers in London and New York are open for business, which can cause an increase in market liquidity and volatility.

#2 GBP/USD

GBP/USD is a currency pair consisting of the British pound (GBP) and the US dollar (USD). It is one of the most liquid currency pairs in the forex market, which means high demand and supply, making it easy to buy or sell. The exchange rate of GBP/USD is often influenced by the monetary policy of the Bank of England and the Federal Reserve, as well as the economic and political conditions in the UK and the US.

Is GBP/USD A Good Pair To Trade?

Trading GBP/USD, known as the “Cable,” can be a good choice depending on various factors:

1. Volatility: GBP/USD is known for its volatility, which can lead to significant price movements. This can offer opportunities for profit but also increases risk.
2. Liquidity: As one of the most traded currency pairs, it offers high liquidity, meaning trades can be executed quickly and with minimal price slippage.
3. Market Hours: Since it involves the British pound and the US dollar, it’s active during both the London and New York trading sessions, providing more opportunities to trade.
4. Economic Releases: Both the UK and the US have regular economic updates that can lead to market movements. Being aware of these can provide trading opportunities.
5. Experience Level: Its volatility and the economic complexity driving the pair’s movements make it more suited for experienced traders.

GBP/USD can be a good pair to trade if you’re experienced, can manage the risks of its volatility, and have a good understanding of the economic factors that influence both the British pound and the US dollar.

What Is The Best Time to Trade GBP/USD?

The London session is the best time to trade GBP/USD, as it is the busiest time for the forex market, and there is typically high liquidity and volatility. The London session begins at 3:00 AM EST and ends at 12:00 PM EST.

#3 USD/JPY

USD/JPY is a currency pair composed of the US dollar (USD) and the Japanese yen (JPY). The exchange rate of USD/JPY is often influenced by the monetary policy of the Bank of Japan and the Federal Reserve, as well as the economic and political conditions in Japan and the US.

Is USD/JPY A Good Pair To Trade?

Trading USD/JPY, often referred to as the “Gopher,” can be suitable based on certain aspects:

1. Stability: USD/JPY is known for its relative stability compared to other currency pairs, making it appealing for traders who prefer less volatility.
2. Liquidity: It’s one of the most liquid currency pairs, ensuring easy entry and exit from trades with minimal slippage.
3. Market Hours: Active during both Asian and New York trading hours, offering extended opportunities to trade.
4. Interest Rate Differentials: The pair is sensitive to the interest rate differences between the U.S. Federal Reserve and the Bank of Japan, which can influence trading decisions.
5. Economic Indicators: Traders must be aware of the economic releases from both the U.S. and Japan, as these can significantly impact the pair’s price movements.

USD/JPY can be a good trading pair if you prefer trading in a relatively stable and liquid market, with the expertise to interpret and act on international economic indicators and interest rate changes.

What Is The Best Time to Trade USD/JPY?

The Asian session which begins at 7:00 PM EST and ends at 4:00 AM EST, can be an excellent time to trade USD/JPY as it tends to see lower liquidity and volatility. This can be attractive for traders who prefer to trade in more stable market conditions.

#4 AUD/USD

AUD/USD is a currency pair of the Australian dollar (AUD) and the US dollar (USD). The exchange rate of AUD/USD is often affected by the monetary policy of the Reserve Bank of Australia and the Federal Reserve, as well as the economic and political conditions in Australia and the US.

Is AUD/USD A Good Pair To Trade?

Trading AUD/USD, often called the “Aussie,” has its unique characteristics that could make it a good trading choice depending on specific factors:

1. Commodity Influence: The Australian dollar is heavily influenced by commodity prices, especially metals and agricultural products. Traders should monitor commodity markets as they can significantly impact AUD/USD movements.
2. Volatility: The pair can exhibit moderate to high volatility, providing potential opportunities for traders to capitalize on price movements.
3. Liquidity: AUD/USD is well-traded, offering good liquidity which means trades can usually be executed quickly and at expected prices.
4. Market Hours: Being a major currency in the Asia-Pacific region, the most active trading hours are during the Australian and Asian trading sessions, but significant movements can also occur during U.S. market hours.
5. Economic Data: Economic releases from Australia and the U.S. can lead to volatility and provide trading opportunities. Keeping an eye on the economic calendar is important.

AUD/USD can be a good pair to trade if you have an understanding of how commodity prices influence the Australian dollar, can manage the volatility, and are prepared to trade during the Asia-Pacific and U.S. market hours while keeping track of key economic releases.

What Is The Best Time to Trade AUD/USD?

The AUD/USD pair tends to be more volatile during certain times of the day due to increased market activity. For example, the overlap period between the Australian and US trading sessions (late afternoon and early evening in Sydney) tends to show higher levels of volatility.

What Is Currency Trading?

Currency trading, often referred to as forex (foreign exchange) trading, involves buying and selling currencies to make a profit. It’s the act of exchanging one currency for another, usually through a broker or a trading platform. Here are the key points about currency trading:

1. Market Size: The forex market is the largest financial market in the world, with trillions of dollars traded daily.
2. Market Participants: It includes central banks, commercial banks, financial institutions, corporations, and individual traders.
3. Trading Pairs: Currencies are traded in pairs, where the value of one currency is compared against another. For example, in the EUR/USD pair, you are buying euros and selling U.S. dollars.
4. Liquidity: The forex market is highly liquid, meaning currencies can be bought and sold quickly and at any time during trading hours.
5. 24-Hour Market: The market operates 24 hours a day, five days a week, due to the global nature of the economy and time zone differences.
6. Leverage: Forex trading often involves leverage, which allows traders to control large positions with a relatively small amount of capital.
7. Price Movements: Currency prices are influenced by various factors, including economic indicators, interest rates, political events, and market sentiment.
8. Purpose: People engage in currency trading for various reasons, including speculative profit, hedging against currency risk, or converting currencies for international trade and investment.

Currency trading is a complex activity that requires understanding the financial markets, global economics, and risk management strategies.

What Is Currency Pair?

A currency pair is two currencies traded in the forex market. Each currency pair consists of a base currency and a counter, or quote, currency. The counter currency is used to express the value of the base currency. For example, in the currency pair EUR/USD, the Euro is the base currency, and the US dollar is the counter currency.

Currency pairs are traded using a bid price and an asking price. The “bid price” is the price at which someone is willing to buy the base currency with the counter currency. In contrast, the “asking price” is the price at which someone is willing to sell the base currency with the counter currency.

Examples of commonly traded currency pairs in the Forex market include EUR/USD, GBP/USD, USD/JPY, and AUD/USD. Thousands of currency pairs are available for trading, each with its own characteristics and volatility. Forex traders choose currency pairs based on their trading strategies and market analysis.

What Is The Most Volatile Currency Pair?

The most volatile currency pair can vary over time due to changing economic conditions, geopolitical events, and market sentiment. However, traditionally, emerging market currency pairs are known for their high volatility compared to major currency pairs. Among these, the following are often cited as highly volatile:

1. USD/ZAR (U.S. dollar/South African rand)
2. USD/TRY (U.S. dollar/Turkish lira)
3. USD/BRL (U.S. dollar/Brazilian real)

Among the major currency pairs, GBP/JPY (British pound/Japanese yen) and GBP/AUD (British pound/Australian dollar) are known for their higher volatility. These pairs can experience large swings in a short period, making them attractive for traders looking for significant price movements but also posing greater risk.

What Is The Most Traded Currency Pair?

The three most traded currency pairs in the world, based on trading volume and liquidity, are:

1. EUR/USD (Euro/U.S. dollar): This is the most traded currency pair, known for its liquidity and tight spreads, reflecting the economic activities between the Eurozone and the United States.
2. USD/JPY (U.S. dollar/Japanese yen): The second most traded pair, representing the currency exchange between the United States and Japan. It’s known for its liquidity and is often used by traders as a barometer for Asian economic health.
3. GBP/USD (British pound/U.S. dollar): Also known as “Cable,” this is the third most traded currency pair, highlighting the economic transactions between the United Kingdom and the United States.

What Is The Best Forex Pairs To Scalp?

Scalping in forex involves making a large number of trades to profit from small price movements. The best forex pairs for scalping are typically those with high liquidity and low spreads, as they allow traders to enter and exit trades quickly and with minimal cost. Here are some of the preferred pairs for scalping:

1. EUR/USD (Euro/U.S. dollar): Due to its high liquidity and tight spreads, it’s a popular choice for scalpers. Price movements can be more predictable and steady, ideal for quick trades.
2. USD/JPY (U.S. dollar/Japanese yen): This pair is known for its liquidity and relatively stable market conditions, making it suitable for scalping strategies.
3. GBP/USD (British pound/U.S. dollar): While more volatile than EUR/USD and USD/JPY, the GBP/USD pair offers significant opportunities for scalpers due to its liquidity and price dynamics.
4. AUD/USD (Australian dollar/U.S. dollar): It’s popular among scalpers for its steady trends and liquidity, particularly during the Australian and Asian trading sessions.
5. USD/CAD (U.S. dollar/Canadian dollar): Known as the “Loonie,” this pair is favored for scalping because of its liquidity and the correlation with commodity prices, especially oil.

For scalping, it’s important to consider not only the currency pair’s characteristics but also the trading hours, as liquidity and volatility can vary throughout the day. Scalpers should also be aware of transaction costs and have a good understanding of technical analysis to identify short-term price movements.

Benefits Of Forex Trading

In forex trading, there are several benefits, including:

• Flexibility: Traders can trade forex from anywhere in the world as long as they have an internet connection, making it easy to manage trading even when away from the office or abroad.
• High liquidity: The forex market is the world’s largest and most liquid, making it easy to buy or sell currencies anytime.
• Extended trading hours: The forex market is open 24 hours a day, 5 days a week so traders can trade at any time according to their preference.
• High leverage: Many forex brokers offer high leverage, allowing traders to trade with a smaller capital than the required amount.

Conclusion

In conclusion, the foreign exchange market offers hundreds of different currency pairs, but the top four most actively traded currency pairings in 2024 are EUR/USD, GBP/USD, USD/JPY, and AUD/USD. These highly liquid pairs offer tight spreads, making them easy to buy and sell. Each currency pair’s exchange rate is influenced by various economic, political, and financial factors in the respective countries. Traders can buy or sell currency pairs based on their predictions for the relative value between the currencies. However, because exchange rates change quickly and often, trading currencies comes with high risk. Traders must be knowledgeable about the foreign exchange market and proficient in managing risks.