Over the years of forex trading, there must be one or two currency pairs that become 'favourites', right?
Here, the INTRADAY team wants to share some currency pairs that are often traders' favorites and why they are chosen.
1.EUR/USD (Euro/US Dollar)
The most popular & actively traded pair in the forex market because of its high liquidity, making it easy for short-term traders to buy and sell it quickly.
These two currencies are the most stable in the world.
Be the choice of traders who use fundamental analysis when economic data is released from the United States and the European Zone.
Tends to follow the pattern of technical analysis, making it attractive to traders who use the technique as a trading strategy.
2. USD/JPY (US Dollar/Yen)
The second most liquid pair after EUR/USD.
It has a strong negative correlation with safe-haven assets, making it a choice for traders who want to hedge against risk.
So the choice of traders who use fundamental analysis when economic data is released from the US and Japan.
Tends to follow technical analysis patterns.
3. GBP/USD (Pound/US Dollar)
One of the highest liquidity pairs.
High volatility, offering traders the opportunity to make big profits. But high volatility means high risk.
Has a strong positive correlation with other risky assets, such as the stock market. When the risk is high, this pair tends to increase, or vice versa.
Be the choice of traders who use fundamental analysis when economic data is released from the US and UK.
Tends to follow technical analysis patterns and is predictable compared to other currency pairs.
4. XAU/USD (Gold/US Dollar)
Gold is considered a safe-haven asset, investors tend to buy gold during economic or political uncertainty.
Hedging against inflation, as prices tend to rise when inflation is high.
Tends to follow technical analysis patterns.
Gold is the choice of long-term investors.
5. GBP/JPY (Pound/Yen)
The choice of traders who are interested in cross trade.
Known for its high volatility, it offers traders the opportunity to make huge profits. But high volatility means high risk.
Has a strong positive correlation with other risky assets, such as the stock market.
Tends to follow technical analysis patterns and is predictable compared to other currency pairs.
6. EUR/JPY (Euro/Yen)
Has relatively high liquidity.
Has a strong positive correlation with other risky assets, such as the stock market.
Be the choice of traders who use fundamental analysis when economic data is released from the European Zone and Japan.
Tends to follow technical analysis patterns.
However, like any other currency pair, trading in the above pair carries certain risks and traders still need to be careful when making any trades.
