Top 5 Most Traded Currency Pairs in Forex

Top 5 Most Traded Currency Pairs in Forex

Currencies that are most traded world wide span across multiple continents and belong to different countries, some of the strongest economies on the globe. The list contains major forex pairs, with additional “safe haven” currency pairs and those who have historically maintained stable trade links. The foreign exchange market is considered the largest and most liquid market out there, offering the chance to carry out exchanges between two nation’s currencies. Currency pairs are divided in three different categories:

  • Major currencies
  • Minor currencies
  • Exotic currencies

A resulting outcome of these categories is a flourishing market that provides hundreds of possible currency pairs available for trading. The FX market is open 24 hours, from Sunday evening to Friday night, which incorporates all of the time zones, including London, New York and Tokyo. This allows a continuous flow of open and close positions throughout the day, without the problematic time restrictions that exist in other markets, making these trading hours the most flexible. 

  1. EUR/USD

The Euro and the Dollar combined make up a nickname known to forex traders as “the fiber” and this pair is generally referred to as the most traded currency pair. The reason backing this statement is the fact that it originates from the two massive and most reputable economies in the world. The association that follows this pair is that it has very low spreads, high liquidity and the capability of large trade volumes. This combination is one of the leading ones for forex scalping, given that the markers are fairly stable throughout the year. This is why the EUR/USD is considered one of the most profitable currency pairs on the FX market, when more frequent and smaller earnings are in play. 

  1. USD/JPY

The combination of the US dollar and the Japanese yen is dubbed “the Gopher” among forex traders. It can also be found on the “most popular and trending’ list, largely due to the eminence of the Japanese Yen all around the Asian continent and the popularity of USD globally. This pair is famed for high liquidity, which ensures buying and selling in large volumes without or with insignificant price fluctuations in its exchange rate. The USD/JPY is also famed for having one of the tightest spreads in the forex marketplace, which implies the overall cost reduction of the trade. 

  1. EUR/GBP

“The Chunnel” represents the Euro and the British Pound Sterling combined, which is a wordplay for the Channel Tunnel that is placed between both continents. The EUR/GBP pair is perceived as generally strong, thanks to region proximity and their solidified trading history. The resulting backlash of Brexit on the economy made the forex pair more volatile in the past couple of years, which is considered alluring to skillful traders. The exchange rate can also vary depending on the interest rates that are usually posted by regional banks, consequently making one currency stronger compared to the other, thus ensuring more volatility. This is something that can be applied for all of the mentioned currency pairs on this list. 

  1. GBP/USD

The GBP/USD is also known as “the Cable” and is perceived as a particularly volatile pair which is a result of recurring fluctuations in price, pip movements and exchange rate. This can lead to distinctively large profits if the trader manages to succeed. However, it can also result in equally large losses when a trader experiences especially high volatility in the FX marketplace. This currency pair is religiously followed by day traders who are looking to take advantage of the constant price fluctuations. They profit mostly by dipping in and out of the market, quickly, yet with precision. This is why this particular currency pair is also favored among swing traders, who also use short-term moves and strategies. Traders who follow and trade this volatile pair should take the advice and strengthen their knowledge of technical analysis of the FX market, before even considering opening any positions. 

  1. USD/CHF

The combination of the US dollar and the Swiss franc is called “the Swissie” among traders. This currency pair is considered a safe haven for traders, thanks to Switzerland’s ongoing financial stability. In times of market volatility, many traders will rely on trading the Swiss franc. When there are troubling events regarding the economy or there is a political situation brewing that suggests concern, forex traders turn to this currency pair, making it very popular in demand. The USD/CHF pair represents one of the most stable currency pairs and this, in turn, offers many advantages. Nonetheless, when the markets are stable, traders show less interest in this currency pair, and opt for other majors featured in this article.