Identifying the majors in Forex is important in order to make good trades. In the forex market there are 7 major currencies, and they are the EURUSD, GBPUSD, AUDUSD, USDCAD, CADCHF, USDJPY and BCHUSD. Knowing the difference between these currency pairs can make a big difference in the results that you are able to get from trading.
EURUSD
Probably the most popular forex pair in the world is the EUR/USD, also known as the euro against the US dollar. This particular pairing accounts for almost 30% of all forex trading volume and has been traded for over a decade.
The EUR/USD pair has a lot of pros and cons, but it’s also the most liquid of all currency pairs. Moreover, it offers the tightest spreads of any currency pair. This means that the market price does not have to move much to get a good profit.
The other good thing about the EUR/USD is that it’s a relatively cheap currency to trade. This has led many speculators to flock to this pair. In addition, it has a large daily trading volume.
The EUR/USD also has a positive correlation with another pair, the GBP/USD. This is because of the strong relationship between the Euro and the British pound. Moreover, the US-China trade war is also affecting the value of the US dollar.
Another major reason for the EUR/USD’s popularity is its high liquidity. This is because there are several traders offering quotes on the pair.
It’s important to remember that in order to trade EUR/USD, you must know how to identify the factors that affect it. For instance, interest rate updates from the US Federal Reserve and the release of economic data from the EU or the U.S. may have a big impact on its price.
GBPUSD
Generally, when the term “GBPUSD” is used, it refers to the British pound/US dollar pair. This currency pairs’ dynamics share similarities with the EUR/USD market.
There are several factors that affect currency prices. These include political issues, the economy of the country, and good trading practices.
The UK is considered to have an economy that is closely tied to the European Union. As a result, the country’s economic performance is important to watch. A recent CPI miss, for example, could have pushed GBPUSD lower. However, a pullback to local highs at 1.233 looks likely.
The British pound has a positive correlation to other currencies, including the euro. It has also been a popular currency for carry trade strategies, a trade where you buy a low-yielding currency and sell a higher-yielding one.
The price of the EUR/USD pair is relatively cheap. This makes it attractive to speculators, especially when compared to the US dollar. If the euro strengthened, then the EUR/USD would rise.
The value of the dollar is dependent on interest rates, economic data, and political instability. This can be caused by a trade war, an election, or corruption.
A major forex pair is a pair of currencies that is highly liquid and widely traded. This is because it has a large volume of buyers and sellers. This allows traders to enter and exit the market with ease. The bid and ask spreads on major forex pairs are typically the tightest.
USD/CAD
Generally speaking, the USD/CAD is a major forex pair. It is also one of the seven most traded currency pairs. In fact, the majority of all FX deals are made with these pairings.
The majors are the most liquid and most heavily traded. They tend to have narrower spreads, which are defined as the difference between the price of buying and selling. This allows traders to enter and exit the market with minimal risk.
The most commonly traded major forex pairs are EUR/USD and GBP/USD. These pairs are often referred to as the ‘four majors’.
In addition to the majors, there are minor and exotic currency pairs. The most popular commodity currency pairs include AUD/USD, NZD/USD and USD/CAD. These are largely influenced by the commodity prices of the countries involved.
Another factor that can affect the price of the majors is geopolitical instability. When a country experiences political scandals or other issues, investors demand less currency. This is a common way to gain profits in the forex market.
The currency market is also governed by interest rates. When a country’s economy is expanding, central banks increase interest rates. In contrast, when the economy is weak, the central bank decreases interest rates. The rate of inflation determines the exchange rate of the major currencies.
