A Collection of Currency Pair Characteristics in Forex Market

Today’s post has a challenging goal: spur contribution from our readers to participate in a global project that aims to collect as many currency AND currency pair characteristics as possible!

Each currency pair has its own specific behavior, movement, and (tiny) detail that traders recognize and understand as their experience level grows. In fact, focusing on trading currencies and pairs that a trader knows intensively can provide a winner’s edge.

In a way knowing the product you are trading in more depth than others gives you home court advantage, so you are at the right address if you are interested in knowing more ‘secrets’ of the pairs and currencies. Here below you will find a list of those features, which are either common knowledge or behavior I have noticed.

This list is far from complete! So please feel free to add your experiences and thoughts to this list by placing a comment below the article!

PAIR #1 EURUSD

There is no secret that the EURUSD attracts the biggest trading volume in the Forex market and is therefore the biggest pair with lowest spreads available. Here are other observations:

  • The EURUSD is heavily impacted by news events such as the NFP, FOMC, quantitative easing, Euro zone struggles.
  • Most of its movement is made during the London session, but it typically does not make a ton of movement in a day.
  • Its daily range is about average.
  • I have noticed that the EURUSD likes to keep pushing in one direction for most of the trading day and that the pair often prefers deeper Fibonacci levels.

20- 11- 2014 gbpusd

PAIR #2 GBPUSD

The GBPUSD absolutely loves to spike up and down, and is well-known for its volatility and big movements. Here are other observations:

  • The Cable makes the most movement during the London session;
  • During the London open it likes to make spikes up and down and often encounters false break outs;
  • Price likes to challenge support and resistance;
  • GBPUSD often retraces to deeper Fibonacci levels like the 78.6 and 88.6;
  • Its daily range is usually quite high;
  • It’s a pair that likes to make spikes against the trend and in those cases it is therefore an interesting pair to trade against the momentum;
  • On many trading days there is a GBP news event which heavily impacts this pair and the market can remain quiet till the news event is over;
  • The pair is heavily impacted by news events such as the NFP, FOMC, quantitative easing, Euro zone struggles.
  • I have noticed that the start of the reversals is often very choppy, corrective and slow.

PAIR #3 USDJPY

The USDJPY is another pair that is heavily impacted by the big US Dollar news events. Here are other observations:

  • When the USDJPY is in a consolidation, it can really slow down tremendously and the range often is ultra small;
  • When the USDJPY is in a major trend, it usually continues in that trend with no major or large pullback. It keeps pushing and pushing and only pauses for a smaller bear or bull flag break;
  • In a trending mode, the typical Fibonacci levels for the USDJPY are 23.6 and 38.2 Fibonacci retracement levels.

20- 11- 2014 usdjpy

PAIR #4 AUDUSD

The AUDUSD is the opposite of the GBPJPY or GBPUSD as it’s more of a slower mover. Here are other observations:

  • Price will keep pushing in one direction but will frequently face pullbacks before continuing with the trend;
  • The Aussie news event often has a big impact on Aussie pairs;
  • The AUDUSD is a pair that moves quite a lot during the Asian session, but also moves decently in London and New York sessions;
  • The Aussie currency is heavily tied to commodities, Australian exports, and Chinese economic data (such as import, export, and manufacturing);
  • The AUDUSD is therefore also known as a “risk off-risk on” currency pair. With risk-on the AUDUSD price goes up, with risk-off the USD is in demand and the AUDUSD goes down.

PAIR #5 EURJPY

Here are its main observations:

  • The EURJJPY moves a lot of pips as well: more than the USDJPY but less than the GBPJPY;
  • It is more suitable for all types of traders;
  • The EURJPY often has chart patterns such as the bear flag and bull flag on its chart.

PAIR #6 GBPJPY

Here are its main observations:

  • The GBPJPY moves a ton of pips and has massive volatility;
  • In fact the GBPJPY is probably on average the pair with the biggest movements and its nickname the Ferrari refers to its speed of movement;
  • It is not a recommended currency pair for traders who just started trading.

20- 11- 2014 gbpjpy

PAIR #7 EURAUD AND GBPAUD

Here are its main observations:

  • These currency pairs are big movers as well and roll up and down quickly;
  • These currency pairs often are in trending mode which last for quite a long time.

PAIR #8 USDCAD

Here are its main observations:

  • The USDCAD is nick named the Loonie, apparently because of its crazy moves up and down;
  • The volatility is not that drastic in my opinion but can pick up with oil related news events.

PAIR #9 USDCHF

Here are its main observations:

  • There is historically high correlation with the EURUSD;
  • The Swissy often increases in value when there is a ‘flight to safety’.

PAIR #10 EURGBP

Here are its main observations:

  • The EURGBP is a slow moving pair on average with low levels of volatility;
  • But despite the lower movement it does have occasional nasty spikes.

Please add to this post your thoughts, comments, tips, tricks, and more down below.

Thank you for sharing this post and wish you a grand weekend and Happy Hunting!

P.s. Oh and don’t be scared to share your wisdom on any of the pairs or currencies as people who will read this blog are not going to cause your edge to disappear – the market is too big for that.

P.s.2. So leave a comment down below with silly and interesting things you have noticed with pairs and currencies!

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  • Daylon

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  • Phoebe Ejimbe

    A great article and very very enlightening! Many thanks, Chris!

  • Chris

    Hi Reddy, glad that you found the article useful! Always good to hear that. Thank you for taking the time to place a post!

  • Reddy

    That’s great information Chris, Thanks a lot.