What is a currency pair?
Currency pair on - banked currency quoteA currency pair is a currency pair in which the base (traded) currency is written on the left (first) and the quote currency (quoted currency) is written on the right (second). The value or rate of a currency pair means the amount of the quoted currency that can be bought for a unit of the base currency.
In simple words, in the market (Forex), one currency is bought or sold for another currency, thus forming a currency pair.
Why do you need currency pairs on ?
The currency pair is the main instrument Forex currency market. The set of currency pairs is standard and limited by the number of freely convertible currencies multiplied by 2. The most popular or basic currency pairs are those that include the US dollar - EURUSD, GBPUSD, USDJPY, etc.
How is the currency pair labeled on ?
Currency pair record - these are abbreviations (in accordance with standards ISO 4217) of the respective currencies in sequence (without spaces, but sometimes with a right slash "/"). For example, the currencies of the euro (EUR) and the dollar (USD) together constitute a currency pair EURUSD (euro–dollar). Buying this currency pair means buying euros for dollars.
Always, in any case, whatever currencies are paired is bought first of the currencies in the pairing for the second. So, the purchase AUDCAD means buying Australian dollars for Canadian dollars. Similarly, selling EURUSD means selling euros for dollars.
How are currency pairs characterized?
Currency pairs on have two crucial characteristics:
- Volatility
Volatility is the number of pips that a currency pair has moved over a certain time period. Usually intraday volatility is analyzed, i.e. how many pips the pair has passed from the price maximum to the price minimum
- Correlation
Correlation shows how the movement of a currency pair is related to the movement of other pairs when exposed to the same factors.
How to choose a currency pair to trade on ?
The choice of currency pair depends entirely on the personal preferences of each trader and the trading strategy he uses. Beginners are recommended to choose currency pairs among the main currency pairs, because they can find the largest amount of information and analytical forecasts, while paying attention to pairs with not very strong movement of quotes. Most often, beginner traders start trading with the main currency pair EUR/USD.
Based on the fundamental and technical analysis for each currency pair, the following is done forecastThe following table summarizes the future outlook for currencies based on the available data.