10 of the Best Forex Pairs To Trade

All forex traders at some point will usually end up focusing on a few pairs more than others, but is there a simple way to find what are the best forex pairs to trade?

This is the question we will work to answer throughout this guide, as we explore the different types of forex pairs, those traded most during the various forex trading sessions, before looking at 10 of the best forex pairs to trade that you may wish to consider putting on your radar.

Different types of forex pairs

The various forex pairs are often split into groups of majors, minors, and exotics. The exceptions are the pairs that do not include the US dollar, which are known as cross-currency pairs. The majors include EUR/USD, USD/JPY, GBP/USD, and USD/CHF. The minors include all of the other currency pairs that involve the US dollar.

The exotics are those currency pairs that are not as frequently traded as the majors and minors. These pairs tend to be more volatile and have less liquidity than the other two groups. Some examples of exotic currency pairs include EUR/TRY, USD/SEK, and GBP/JPY.

Forex trading sessions

The various forex trading sessions around the world are generally split into 4 main sessions. These 4 main sessions are the Sydney session, Tokyo session, London session and finally the New York session.

The main currency pairs that are traded in each of these sessions are as follows:

• Sydney Session: AUD/USD, NZD/USD
• Tokyo Session: USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY
• London Session: EUR/USD, GBP/USD, USD/CHF
• New York Session: USD/CAD, USD/JPY, EUR/USD, GBP/USD

The 10 best forex pairs for trading

1. EUR/USD – The most traded currency pair in the world

The EUR/USD is the most traded currency pair in the world. This is in part aided by the fact that the eurozone is the second largest, and the United States economy is the largest in the world. Before the departure of the UK economy from the EU, the body was the largest economy, even if the UK never adopted the Euro as a currency. The most popular trading session for EUR/USD is called the “London session”.

EUR and USD are both forex ‘majors’. meaning they are highly liquid and widely traded. This large amount of liquidity makes it very easy to enter and exit trades, and also helps to keep spreads tight. The EUR/USD is considered a ‘barometer’ for the forex market, due to its widespread popularity and you will this pair available with all forex and CFD brokers.

2. USD/CAD – A popular currency pair for trading

USD/CAD is a popular currency pair for trading, as the economies of the United States and Canada are highly interlinked. The two countries are also major oil producers, meaning that the price of oil can have a significant impact on the exchange rate. The most popular trading session for USD/CAD is called the “New York session”.

USD and CAD are both forex ‘majors’. meaning they are highly liquid and widely traded. This large amount of liquidity makes it very easy to enter and exit trades, and also helps to keep spreads tight. US and Canadian forex traders will want to keep a close eye on this pair.

3. USD/ZAR – A currency pair with high volatility

USD/ZAR is a currency pair with high volatility, due to the large difference between the two economies. The United States is a developed economy, while South Africa is an emerging market. This means that there can be large swings in the exchange rate, making it an attractive choice for traders looking to make a quick profit. The most popular trading session for USD/ZAR is called the “New York session”, which opens in the afternoon for South African based forex traders.

4. GBP/USD – Sterling shines in times of global uncertainty

The GBP/USD is the third most traded currency pair in the world, and is also known as “sterling” or “cable”. The GBP is the fourth largest reserve currency, after the USD, EUR and JPY. The UK economy is considered to be very stable, and this is one of the reasons why the GBP is seen as a safe haven currency. When global economic uncertainty rises, investors have historically flocked to the GBP as a safe haven asset. This increased demand then causes the GBP/USD exchange rate to rise.

5. EUR/GBP – A currency pair with low volatility

The EUR/GBP is a currency pair with lower than average volatility, due to the close economic ties between the two countries. The eurozone is the UK’s largest trading partner, and this close relationship means that the two economies are very interlinked.

This causes the exchange rate to be relatively stable, making it an attractive choice for traders looking to minimise risk. The most popular trading session for EUR/GBP is called the “London session”.

6. EUR/CHF – The Swiss franc is a safe haven currency

The EUR/CHF is a popular currency pair for trading, as the Swiss franc is seen as a safe haven currency. This means that when global economic uncertainty rises, the demand for the franc increases, causing the exchange rate to rise. The most popular trading session for EUR/CHF is called the “Frankfurt session”.

7. EUR/TRY – A volatile currency pair

The EUR/TRY is a volatile currency pair, due to the large difference between the two economies. The eurozone is a developed economy, while Turkey is an emerging market. This means that there can be large swings in the exchange rate, making it an attractive choice for traders looking to make a quick profit. The most popular trading session for EUR/TRY is called the “Frankfurt session”.

8. USD/JPY – A popular currency pair for carry trades

The USD/JPY is a popular currency pair for carry trades. This is because Japan has a low interest rate, and the United States has a higher interest rate. This makes it easier to make money by borrowing in Japanese Yen, and investing in US Dollars. The USD/JPY is also a very liquid currency pair, which makes it easy to enter and exit trades.

The USD/JPY is the most traded currency pair in Asia with the most popular trading session for USD/JPY being called the “Tokyo session”.

9. AUD/USD – One of the best forex pairs for trading the Sydney session

The AUD/USD remains one of the best forex pairs to trade as the Australian economy is supported by commodities such as iron ore and coal. These commodity exports have helped to make Australia one of the most export-dependent countries in the world. The AUD/USD is also a liquid currency pair, making it easy to trade.

This is one of the best forex pairs to trade for Australian based forex traders, due to the knowledge and timezone.

10. AUD/NZD

The AUD/NZD is a popular currency pair for trading, as the two economies are highly interlinked. The two countries are also major producers of dairy products, meaning that the price of milk can have a significant impact on the exchange rate. The most popular trading session for AUD/NZD is called the “Sydney session” so is a popular currency for trading in Australia.