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16 Nov 2020
4 min read

The Ultimate 2020 Guide to Forex Currency Pairs

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Written by OspreyFX News Team

A Comprehensive Guide About Forex Currency Pairs in 2020. 

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions for more information.

Key Takeaways:

  • Defining forex currency pairs and how they move
  • The major currencies and safe haven currencies
  • How you can kick off your forex career

You would never apply for a job without being suitably qualified, right? Well, you’d be surprised at the number of forex traders who are risking their capital without knowing the very basics of forex trading. 

Before you start trading on the currency market you need to know the very basic concepts that will help you kick off a solid trading strategy.  

So, if you have been trading for 10 minutes or 10 years, do yourself a favour. Read this article. I am sure you’ll learn something new once you read the below, saving yourself some time and money in the process.  

What is a currency pair and how does it move? 

Starting off with the very basics, let’s look at what currency pairs are and why you need them to move if you want to make some money.   

As expected, a currency pair involves two currencies. The currencies are relative to each other and their respective value compared. The first currency is always the ‘base currency’ while the second one is the ‘quote currency’. For example, if we are trading EUR/GBPEUR would be the base currency while GBP would be the quote currency. Simple, right? 

So why do you need them to move if you want to profit while trading? On the contrary of other markets, the forex market never sleeps. Currency pairs are always in motion, with both the base currency and the quote currency operating in a constant state of flux. So, while both currencies can strengthen or weaken against each other, the velocity of any move is relevant to the relationship between the two currencies. For example, if one currency is weakening while the other is strengthening you can be sure that the move will be much bolder if only one currency is moving. 

Forex-Pairs

Which are the 8 major currencies and the different types of currency pairs? 

There are a wide variety of currency pairs to choose from. However, every forex trader needs to know the eight major players in the forex market. They dominate the market because they are the most popular and so the most liquid. These are: USD, EUR, GBP, CHF, AUD, CAD, NZD. JPY. The major currency pairs are all the ones that feature USD. If a pair doesn’t involve USD, then it isn’t major. It is also important to be aware of minor pairs and cross currencies.  Cross Currency pairs are any pair that does not include USD. A minor pair are a major currency cross. That is, pairs that include EUR, GBP and JPY.  

For more clarification and a complete list of currencies and the different type of pairs available, make sure you check out OspreyFX’s list of currency pairs.  

Which are your safe haven currencies? 

As we have seen recently with the onset of COVID-19 pandemic, you might need to turn to more stable currencies. Such currencies are more likely to retain or even increase their value during turbulent times. Gold, the Swiss Franc (CHF), USD and JPY are all considered to be safe haven currencies. However, bear in mind that it depends a lot on the particular down market.  

Who can trade on the forex market? 

Anyone can trade on the forex market. That being said, the bulk of the transactions are taken up by Central and Commercial BanksHedge Funds and investment firms. Sophisticated online trading platforms such as OspreyFX require only a minimum deposit of $10 to trade on the currency markets, opening up new opportunities to both novice and professional traders.  

Where do I start? 

All you need to do to step into a world of trading opportunities is sign up to OspreyFX. Over 50 forex currency pairs are available with just a minimum deposit of $10. We also offer 24/7 customer support to suit all schedules and all levels of trading 

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Where Do I Start? 

All you need to do to step into a world of trading opportunities is sign up to OspreyFX. Over 50 forex currency pairs are available with just a minimum deposit of $10. We also offer 24/7 customer support to suit all schedules and all levels of trading