Are you looking for the best major forex pairs to trade in 2022?
I’m excited to share with you my 5 favorite currency pairs because in forex, they are the best instruments in my opinion. They have a lot of liquidity and volatility which makes them perfect for trading. If you want to make money in forex for the next year, these are the fx pairs that will help you do it!
I want you to be successful in your trading career, so I put together this list of the top 5 currency pairs that will help you do just that – and fast! If you want to learn how these currencies work and why they’re great for trading, then read on below!
The definition of the major currency pairs
Major pairs are the most heavily traded currencies. They include currencies from the world’s largest and most stable economies – some popular pairs include EUR/USD, GBP/USD and USD/JPY. Major pairs are popular among beginner and expert traders due to the high liquidity and low spreads.Source: Easymarkets.com
EURGBP is a very popular forex pair for traders to speculate on. It’s a great option because it has a strong correlation between the EUR and GBP, but also because of the forex rebate programs that give you access to this trade without any capital outlay.
The EURGBP pair represents the two largest economies in Europe (and, the largest and sixth largest in the world). The economies are also each other’s main trading partners. That being said, there is some debate on the exact trade statistics between the UK and the euro zone due to routing and customs practices. This means the cross maintains healthy liquidity in most conditions.
Two factors lead to the unusual behavior of the currency pair. The first is the trade and economic integration between the UK and the euro area. This causes both to be affected by economic situations similarly. Thus, economic pressures will push on both of the currencies somewhat equally.
The second factor is arbitrage. If either of the currencies were to move out of sync, traders taking advantage of the disparity will immediately bring them back in line.
Because the relative value of each currency moves in tandem the chart stays mostly flat. However, when there is something that could cause a difference in economic outlook between the two this can drive significant volatility in the pair. This is because arbitrage now works in the opposite direction.
The EURJPY Pair has historically had some of the widest fluctuations among pair trading markets. JPY (Japanese Yen) is one of the strongest currencies in the world, yet its not mutually traded with more than 170 other countries, making it more challenging to trade. Pairing JPY against EURO offers an easier means of directing purchases and funds across international borders without necessary fees for exchanging currencies.
The reason why I think EURJPY is a good pair for trading is because the trend changes very often. I have never had a period where this pair was long until just now, and that’s not normal. If you’re going to do Forex, then Euros are a more stable currency than you might think, and Yen can be a low-risk, high profit option depending on which way the trend goes.
One of the strongest relationships between global currencies is the pair EUR/JPY. The euro bounces up and down around 1.55, while the yen pretty much stays in a tight band against the dollar near about 120 to 130 yen for each dollar.
There are many factors that make this pair so popular with traders, but probably one of the most important has to do with how JPY responds to changes in risk sentiment created by geo-political events. If there’s some kind of fear driving investors into safer assets then competitive devaluations through currency markets have historically been more frequent impacting forex prices, more specifically EURJPY pricing more heavily than any other currency on earth because of how extensively they are traded relative to their volatility.
GBPAUD is one of the major pairs in forex. Out of all the trading hours, it has moderate trading volume during the Asian session break but strong trading volume throughout other timeframes.
Long term traders are tasked with holding their positions for a longer duration than other forex traders, but risk should be reduced due to the simple nature of the relationship between these two currencies.
An entire strategy can be created just by looking at how this pair behaves over 1 day periods relative to USDCAD Index which shows how this pair performs against any negative events that affect its stability or value.
This makes GBPAUD an excellent trade-able show because you know that when you place a trade, there is absolutely zero chance that something might go wrong.
The GBPAUD prices are often highly correlated due to Australia’s strong economic association with the United Kingdom.
That means that if you see GBP performing well, then AUD will likely be performing similarly, which should make trading either currency easy money for anyone who has an eye on the market.
Additionally, because this pairing is so sensitive to economic news in Great Britain and Australia, it is probably one of the most financially related forex pairs in the world – meaning any macroeconomic change might affect these price points very quickly. Forex traders don’t want it any other way! It just adds fuel to their fiery fury! Or something like that.
Great Britain and Australia have a complementary trade relationship – imports from one to the other cover a wide range of sectors, after taking into consideration the fact that both countries currently have an overvalued currency. In addition, it is difficult for Australian exporters to find any export markets aside from Great Britain given its small population. The good news is that greater competition in these particular trading partners should drive prices down and make goods more affordable. This will lead to lower unemployment rates in each country which in turn will allow their respective currencies to drop below fair market values!
The currency pair EUR/CHF is one of the most popular pairs in forex trading. It’s unique because it has extremely high volatility which means that there are many opportunities to make money. If you want to start making real profits with your investment then this is the right place for you!
The euro and the Swiss franc are inversely correlated, meaning when one gets stronger, the other weakens.
The monetary policy in the eurozone is set by the European Central Bank (ECB), while that of Switzerland is dictated by the Swiss National Bank (SNB).
Switzerland has a strong reputation for stability and fiscal responsibility, so Europeans often turn to them to store their wealth. The eurozone is economically larger, but the Swiss have a better reputation for stability. Switzerland is a European country that relies heavily on the financial industry and exports, in contrast to the eurozone which has a broad-based economy.
GBPCHF is a popular forex pair because it tends to be very stable. The British pound is a relatively strong currency, and the Swiss franc is also considered a safe haven currency, so this pair usually doesn’t experience many dramatic swings in value.
That said, there can still be opportunities to make profits by trading GBPCHF, especially when there are major news events that cause sharp movements in the markets. Keep an eye on this pair and be prepared to take advantage of any price fluctuations!
There are a few reasons why you should trade GBP/CHF. First, this pair is highly correlated to the price of gold. When gold prices go up, GBP/CHF prices usually go up as well. Second, this pair has a low spread, which makes it ideal for traders who want to keep their costs down.
It’s actually very easy to make a profit even with relatively small movements in the market because of the low spread.
Finally, CHF is considered a very safe currency, which means that it tends to hold its value during times of economic turbulence. For these reasons, trading GBPCHF can be profitable for investors who understand how the global markets work.
Conclusion | The major forex pairs to look for in 2022
These 5 currency pairs are my favorites for the next few weeks and months because the setup looks good, they’re easy to trade and have a high chance of success. They also offer low spreads which means you can make more money on each transaction. You won’t find another list like this anywhere else!
FAQ related to these major forex pairs
What are the most traded currency pairs?
The most traded major forex pairs are EURUSD, GBPUSD, USDJPY, AUDUSD and NZDUSD. You can read more about the most traded forex pairs here.
You may also be interested to learn more about AUDJPY, AUDNZD, CHFJPY, EURAUD and EURCAD. In this article I have tried to answer some of the most commonly asked questions about these fx pairs. I hope you have found it informative and helpful! If you want more information on what the most popular traded currencies are or how to get started in forex trading, check out my other posts.
What is Forex?
Forex stands for “Foreign Exchange.” It’s what happens when one of the 350+ of these currencies trades with another currency – so if you trade EUR/USD or GBP/USD or any other combo of those three letters it will be forex. Currency traders use forex as an asset to generate.
How many currency pairs should I trade?
The answer to the question will depend on an individual’s trading style. In my opinion, it is best to start with two or three pairs, so that you have a good feel for each of them before expanding your repertoire.
Multiple currency traders trade in multiple currency pairs at any one time, which means that every trader has different needs when it comes to managing risk and capital – remember that all trades are quoted in two currencies, making it necessary for traders to also keep track of the “base” currency. Whether it’s stocks, bonds or currency markets; there can be no such thing as diversification without multi-currency exposure!
Factors to consider when trading more than one currency pair?
Trade carefully and take risks carefully but do not neglect getting yourself exposed to as many markets as possible!
There are a wide range of major world currencies and many forex traders might look to trade several different pairs at the same time. Forex traders need to first decide what sorts of trades they wish to do, then begin trading based on their individual goals.
Scalping or Swing trading?
Do you want high-risk event trades? Strategies with high reward potentials or consistent long term investing? All this will depend on two factors that each trader must decide upon before beginning– their attitude towards risk and the amount of capital they have for investment purposes. We have covered the different trading types in this article.
High risk attitudes can open up opportunities for substantial profits in unpredictable markets but these traders may find themselves taking substantial losses as well. While consistent long-term trading is likely more consistent than one’s degree of success, there may be many trading methods that work for different traders. Check out my 15 forex tips for new traders that will help you to understand how important consistency is in forex.
The video below explains in detail how many forex pairs that are recommended to follow to avoid margin calls on your forex account.
How can I trade?
Trading can be done either with real money or risked against your account with virtual money, where you “invest” using just your knowledge of trading and have no risk whatsoever! On top of all that, there are other advantages — like leverage, available 24 hours per day, and simplicity.
Are you looking to trade multiple currency pairs?
You’re in the right place! We have a lot of information for you. First, we want to make sure that you understand how trading works and what it means before you get started. So, let’s start with the basics…
Trading is an exciting way to invest your money into something that has potential for growth over time. The best part about trading is that anyone can do it! It doesn’t matter if you are young or old, male or female—you just need to be willing to learn and put in some hard work.
Are you a a careful long term trader or fast action scalper? Click here now and take our quiz to find out what kind of trader you are.
Next time you’re looking for an opportunity in forex check out our trading analysis here on the site! Thanks for reading!