Whether you’re just starting out with trading Forex, or you’re looking to diversify your trading portfolio, you may want to consider adding more than one major currency pair to your trading portfolio. By doing so, you can potentially increase your overall profits and take your trading strategy to the next level.
EUR/USD
Known as the most liquid forex pair, EUR/USD is a major player in the global forex trading market. It is an effective tool for day trading and scalping.
The price of EUR/USD is influenced by a variety of factors. One of the most important factors is the difference in interest rates between the US Federal Reserve and the European Central Bank.
The US Federal Reserve releases the Federal Funds rate eight times a year. The European Central Bank (ECB) releases the Federal Funds rate monthly.
The EUR/USD has a very unique combination of liquidity and volatility. This makes it ideal for any type of trading strategy.
The EUR/USD pair represents the combined strength of the world’s two largest economies, the euro and the US dollar. Despite the fact that the US dollar is the stronger of the two, the euro will sometimes weaken against it.
USD/CHF
Among the major currency pairs, USD/CHF represents a small share of the global forex market. While it is considered relatively stable, it still has its fair share of volatility.
The value of this pair is determined by economic data. Aside from that, politics and trade wars can also cause instability in the forex market.
As the world’s largest economy, the United States is an important player in the forex market. As a result, the US dollar is highly traded.
The dollar is the main currency used to measure the value of one currency against another. The USD/CHF pair represents the Swiss francs to buy a dollar. This is also called Swissie trading.
USD/CHF is considered one of the most stable pairs in the market. The Swiss franc is a safe haven currency. In addition, it was pegged to the euro for four years after the European debt crisis of 2008. This has helped make the pair relatively stable.
EUR/JPY
Often known as the “Euro to JPY” pair, the EUR/JPY is one of the most popular pairs to trade in the forex market. This pair consists of the euro as a base currency and the Japanese yen as a counter currency.
There are a number of factors that can influence the price of the pair. These include the strength of the country’s economy and political trends. Traders must be vigilant and implement an effective risk management system. This will minimize the damage that substantial losses can do to their trading account.
One of the major factors that affect the price of EUR to JPY is the European Central Bank’s (ECB) interest rates. The ECB’s interest rates will be affected by the European Union’s (EU) economies. When the EU’s economy slows, the euro will weaken.
USD/JPY
Investing in the USD/JPY pair provides traders with the opportunity to earn a profit. The pairing has the potential to be one of the most profitable of all forex pairs, but it can also be very volatile. Traders should know what factors to look for when deciding whether to enter a trade or not.
One of the most important factors affecting the pair’s value is the interest rate differential between the two countries. As interest rates rise, the value of the currency increases. It’s also worth considering other economic factors, such as the consumer price index and wage growth.
Another factor is political instability. Elections, trade wars, corruption, and other events can have an impact on the value of currencies.
Another major factor in the pair’s price is the strength of the country’s economy. The strength of a country’s economy can also be determined by the level of foreign direct investment in its economy.
GBP/USD
Among the major currency pairs in Forex, the GBP/USD pair is one of the most popular. It is also one of the most volatile pairs. It is also the oldest pair in the Forex market.
The GBP/USD pair is often referred to as the cable. It is the currency pair that is connected by the Channel Tunnel between the United Kingdom and the European continent.
The GBP/USD pair is sensitive to political events. It is also affected by monetary policy. It is also affected by the Euro’s strength. Political events such as elections and trade wars can cause instability in the market.
The US dollar is the largest reserve currency in the world. It is the currency that is most often traded. Each day, individuals and organisations convert $6 trillion of cash. The pound is the third largest currency in reserve. It is also the second most traded currency pair.