What is a currency pair?
In one line: A currency pair is two currencies quoted together, like EUR/USD, showing how much of the second currency one unit of the first costs.
A simple example
In forex you never buy "the euro" on its own. You always trade one currency against another. That's why every forex price comes as a pair.
Take EUR/USD at 1.0850. It means one euro costs 1.0850 US dollars. If the price climbs to 1.0900, the euro got stronger against the dollar. If it falls to 1.0800, the dollar got stronger.
So one chart tells two stories at once: the euro's and the dollar's. You can read the full personality of this pair on our EUR/USD page.
Buying and selling a pair
- Buy EUR/USD: you expect the euro to rise against the dollar.
- Sell EUR/USD: you expect the euro to fall against the dollar.
Every trade is a view on both currencies. Good news for the US can push EUR/USD down even when nothing happened in Europe.
Why it matters
The pair you pick decides three practical things:
- What moves it. EUR/USD reacts to the Fed and the ECB. USD/JPY reacts to the Fed and the Bank of Japan.
- How a Pip is counted. Most pairs use 0.0001. Yen pairs use 0.01.
- What a pip is worth. On pairs priced in dollars, a standard Lot is about $10 a pip. On others it shifts with the rate. The pip value calculator does the math.
A common mistake
Forgetting that the order matters. EUR/USD and USD/EUR are the same two currencies, but upside down. Brokers only quote the standard order, so a buy on USD/JPY is a bet on the dollar, while a buy on EUR/USD is a bet against it.
Before you trade any pair, say it out loud: "If I buy, I want the first currency to get stronger." More on that in Base and quote currency.
Questions
How many currency pairs are there?
Dozens are offered by most brokers. They fall into three groups: Major pairs (with the US dollar), Cross pairs (no dollar), and Exotic pairs (a major currency against a smaller one).
Which currency pair is traded the most?
EUR/USD is the most traded pair in the world, according to the Bank for International Settlements' surveys of the forex market.
Can I trade a currency pair on my phone?
Yes. Most brokers and charting apps, including TradingView, show forex pairs on phones. Our forex guide for beginners covers the first steps.
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