Top 5 Best Forex Pairs to Trade 2023

Are you struggling to decide which currency pairs to focus on in the ever-changing forex market? Look no further as we address the pain of sifting through countless options by outlining a comprehensive guide to the best forex pairs to trade.

This article highlights the essential factors to consider, such as liquidity, volatility, and trading strategies. As a result, you’ll have a solid understanding of how to make informed decisions that align with your trading goals.

By the end of this post, you’ll know exactly which forex pairs to keep an eye on and why they are considered the best in the industry. So, let’s dive into the world of forex trading and discover the top-performing currency pairs together!

Some currency pairs are fairly predictable, while others usually make surprising movements every now and then.

Watch Video – Best Currency Pairs To Trade

Factors Considered in Deciding The Best Currency Pairs To Trade

To create a list of the top 5 best forex pairs to trade, here are the factors considered:

• Popularity
• Market Conditions
• Historical Performance
• Volatility and
• Trading cost

The most popular currency pairs are the major currency pairs, currencies that combine with the US dollar.

Talking about market conditions, I analyzed these currencies based on economic data, news events, and trends in the global economy.

Also, I look at each currency’s historical performance to identify which ones have shown consistent trends or patterns in the past.

Further, I considered which currency pairs are favorable for popular trading strategies like range trading, trend following and breakout.

Lastly, Trading costs and volatility. Considering the trading costs associated with each forex pair, such as spreads and commissions. Lower trading costs can significantly affect your overall profitability, especially for short-term traders.

Some traders may prefer more volatile pairs, while others might opt for more stable pairs with lower risk.

Forex traders have different personal reasons for trading a particular currency pair.

buying and selling.

Best Currency Pairs in Forex Trading

Rank	Currency Pairs
#1	EURUSD
#2	USDJPY
#3	GBPUSD
#4	USDCAD
#5	USDCHF

1. EURUSD

EUR/USD (Eurodollar) is the most traded currency pair in the world.

The amount of trading volume that goes with the EUR/USD accounts for 20% of the forex market.

Somehow these statistics don’t equal high volatility.

Because of the strength of the economies involved, the EURUSD is a go-to currency pair as it boosts investor confidence in knowing the prices of the pair are going to be relatively stable.

Both currencies are also largely influenced by political movements.

For example, Euro is the official currency of about 20 countries. Huge economies like Germany, Italy, Greece, etc. have the Euros as their legal tender.

This sort of union already subjects the Euro to multi-levels of economic scrutiny.

Considering these factors, including the fact that the EUR/USD has a low trading spread and relatively low volatility, makes the EurUSD pair number one on this list.

2. USDJPY

Regarding daily fluctuations combined with a strong economy, the Japanese Yen(JPY) comes second place on my list.

The Japanese Yen is the official currency of Japan and the fourth most traded currency behind the Dollar (USD), Euro, and GBP (British pound sterling).

Profitable price actions and large market jumps have contributed to the Japanese Yen’s popularity.

The popularity and trading volume mean forex brokers charge low spreads.

Additionally, the Japanese yen is seen as a safe-haven currency during market turmoil.

3. GBPUSD

Now the third most traded currency in the world, the British pound sterling is the official currency of the United Kingdom, used throughout England, Scotland, and Wales.

Although been part of the European Union till 2016, the United Kingdom never switched over to the euros as their legal tender, unlike many other Western countries.

As a result,  saw sterling down 10% against the dollar in the subsequent months as investors searched for a more stable currency.

The GBPUSD is a currency pair that promises high volatility and market fluctuations.

However, many Traders don’t mind as it also promises a lot of trading profits.

4. USDCAD

This currency pair, also known as the “Loonie,” is affected by oil prices, providing an opportunity for traders to diversify their portfolios and profit from oil market fluctuations.

Indeed, the exchange rate between Canadian and US dollars strongly correlates to the price of oil exported from Canada.

This is because Canada mostly earns its Dollars from the sale of oil to the United States.

As a result, the price of oil exported from Canada has a major effect on the price of the Canadian loonie.

5. USDCHF

The Swiss franc is the official currency in Switzerland.

Known for its stability in times of turbulence, several traders patronize the Swiss franc in times of market volatility.

The movement of the Swiss franc is usually against the movement of other currency pairs in the market.

This means that in times of a general market downturn, the Swiss franc rises.

Several factors, including political stability, exposition on foreign affairs, and approach to business affairs, influence the stability of the Swiss franc.

Popular Questions and Answers

Conclusion – Best Forex Pairs To Trade

Finding the best currency pairs is subject to several factors.

The strengths and weaknesses, the exports and imports, and the political stability of the economy in question primarily influence these factors.

Before trading a particular currency pair, proper market research and market updates are thoroughly necessary, as fundamental analysis plays a huge role in determining the overall movements of the price.

It is useful to keep track of economic announcements that may affect the currency value you are trying to trade.

As many countries and unions push towards globalization, the fate of the currencies is closely interconnected.

Therefore, studying the foreign exchange market before investing in a particular currency is imperative.