72% of retail client accounts lose money when trading CFDs, with this investment provider. You should consider whether you understand how this product works, and whether you can afford to take the high risk of losing your money. USD/CAD is commonly called the ‘loonie’ on account of the loon bird which appears on Canadian dollar coins, and it represents the pairing of the US dollar and the Canadian dollar. In 2019, USD/CAD transactions made up 4.4% of daily forex trades.1 The strength of the Canadian dollar is closely linked to the price of oil because oil is Canada’s main export. Those looking to employ longer-term strategies may also consider an early entry by trading at night. The best time to trade currencies is typically when the market is most active and liquidity is higher.

• Based on your selection, you will register for an account with EF Worldwide Ltd, which is authorised and regulated by the Financial Services Authority of Seychelles (License Number SD056).
• If for instance, the ECB had set higher interest rates than the Fed, it is likely that the euro would appreciate relative to the dollar.
• For example, if the EUR/USD pair ended the US session close to the technical resistance, it could move lower in the Asian markets overnight.
• The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate.
• Unlike the currency pairs mentioned above, GBP/JPY doesn’t include the US dollar.

The high level of volatility can be attractive to traders, but it is important to have a risk management strategy in place before opening a position in a volatile market. The best currency pair for you will ultimately depend on your strategy and interest. But most traders stick to the currency pairs that have the most volume and liquidity – and therefore come with the most volatility. Traders should also be aware that many forex platforms will, by necessity, have larger buy-sell spreads on most currency pairs overnight. Though EUR/CHF (Euro/Swiss Franc) is not a major currency pair, it is popular among traders, particularly due to its inverse relationship with EUR/USD. Those trading the currency pair follow European Central Bank (ECB) releases, European employment rates, and import/export data.

Top 6 Most Tradable Currency Pairs

Day traders using a 5-, 10-, or 15-minute chart, if you are conformable and feel you have enough time to monitor multiple charts and trades, that should be fine. The same goes for day traders with partially or fully automated strategies. Trade more pairs, if desired, since automation means there are fewer tasks you need to manage yourself.

The value of the HK dollar is actually pegged to the US dollar in what’s known as a ‘linked exchange rate’. This means the HKD is only allowed to fluctuate against USD within a set band of between 7.75 and 7.85. The US dollar and the Canadian dollar have a strong correlation, due to being fiscal neighbours and important trading partners. Historically, the value of the yuan has been low compared to the US dollar because the Chinese government has artificially driven down the price to keep its exports competitive on the global market.

Which Pairs to Day Trade and Actively Manage

That trade will be exited and there may be another opportunity, or possibly the exit requires a manual action on the part of the trader. AUD/USD tends to have a negative correlation with USD/CAD, USD/CHF, and USD/JPY as the US dollar is the quote currency in these cases. Trading the pair may be advantageous during the North American or Pacific trading sessions when there is important news in Australia. To keep up to date with any Brexit news that may have affected the price of the EUR/GBP currency pair, visit IG’s Brexit events page. The price displayed for a currency pair represents the amount of the quote currency you will need to spend in order to purchase one unit of the base currency. No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The charts aren’t changing much from minute to minute, so we can set our trades and usually leave them for hours at a time. This allows us to maintain focus when we need it, even when analyzing multiple pairs or managing multiple positions. It is the most heavily traded currency pair in the world and typically has the lowest spread (a trading cost). Occasionally the EURUSD will be moving very little, not providing a lot of opportunities. The GBPUSD usually moves a little more than the EURUSD, so in such cases, the GBPUSD could be day traded instead of the EURUSD.

Which Forex Pairs to Trade Based on Trading Styles

Discover the range of markets you can trade on – and learn how they work – with IG Academy’s online course. If you’re interested in holding AUD, you should keep a close eye on the price of commodities that are crucial to the Australian economy, as well as announcements from the Reserve Bank of Australia or Federal Reserve. More recently, the leading factor to monitor when trading the USD/CNY pair is US-China tensions, which have flared up for a number of reasons over the years. For example, in August 2022, US House Speaker Nancy Pelosi visited Taiwan, which caused Beijing to suspend US-China climate talks and cut off high-level military communication channels.

• The same goes for day traders with partially or fully automated strategies.
• Keep in mind that past performance is no guarantee of future returns.
• At any time of the day or night, at least one of the three major currency markets – Asia, North America and Europe – is open for trading.

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Login to your account, and then select your chosen forex pair.

When trading AUD/NZD, it is important to monitor global commodity prices as well as economic data and geopolitical relations between Australia, New Zealand and China. The overlap between the Sydney and Tokyo markets trading offers a two-hour period of increased price fluctuation as there are more traders in the market. The one-hour overlap between the Tokyo and London markets can also see changes in price action, although there is less time for large fluctuations. Only trade more if it actually results in an improvement in your results over trading one. Trying to trade more than one pair will likely spread our focus too thin, and we may end up missing some trades as we try to jump back and forth between multiple charts. As a result, traders often turn to CHF during times of increasing market volatility, but the Swiss franc will typically see less interest from traders during times of greater market stability.

The Most Popular Forex Pairs

That’s why the yen is commonly said to be under a ‘dirty float’ regime – as it is a floating currency, but not in the truest sense of the word. So, trading USD/JPY is a means of capitalising on these more regular fluctuations – if you’re able to buy and sell at the right time. Similarly, looking through too many charts can make us feel that there are trades in all them of, instead of comparing the charts to see which one or two offer the best opportunity.

What are forex night trading hours?

Trading forex overnight presents opportunities for both long-term investment strategies as well as short-term strategies like scalping. Additionally, the volatility needs to generate price movements over a relatively short period of time—somewhere between days and weeks. While EUR/USD leads the way in terms of daily traded volume in forex pairs, there are a number of other viable currency pairs with high liquidity that traders can choose from in an attempt to realise a profit. The best forex pairs to trade are often the most liquid, offering traders low spreads and faster execution. Discover the 10 most traded currency pairs in the world and how you can start trading them.