Since most of the currency being bought and sold in the foreign exchange market is the dollar, it is the currency most frequently traded.
The second most frequently traded currencies are: Euro (EUR);
The Japanese yen (JPY);
Sterling (GBP);
The Swiss franc (CHF) and the Australian dollar (AUD).
Because the mainstream currency in the foreign exchange market is the US dollar, the mainstream foreign exchange currency pairs are mainly traded with the US dollar currency pair, such as euro /US dollar (EUR/USD), British pound /US dollar (GBP/USD), Australian dollar /US dollar (AUD/USD) and so on.
EUR/USD (EUR/USD) : In the foreign exchange market, the volume of the euro is second only to that of the US dollar, so the euro is the currency with a heavy weighting in the US Dollar index.
Investors can judge the trend of the euro with reference to the dollar index, a strong dollar represents a weak euro;
Conversely, a stronger euro means a weaker dollar.
What are the major currency pairs traded in the mainstream FX currency pairs?
In addition to the euro/dollar (EUR/USD) mentioned above, the following currency pairs also saw significant trading volume.
1. The mainstream foreign exchange currency pair: Sterling /US dollar (GBP/USD). The trend of Sterling is roughly the same as that of Euro. However, as the amount of currency in circulation is smaller than that of Euro, the fluctuation is relatively large.
But once they are right, they are also more profitable than other currencies.
2. The mainstream foreign exchange currency pair: USD/JPY (USD/JPY). People living in Japan are the most likely to trade yen in the foreign exchange market, because they are familiar with the changes of the yen exchange rate.
But the yen has not been particularly easy to operate because of prolonged intervention by the Japanese government.
3. The mainstream currency pair: USD/CHF (USD/CHF), which has the most regular trend in the foreign exchange market, is because the Swiss franc is the easiest to use technical analysis to judge.
K-line theory, shape theory, wave theory and other existing technical analysis methods are more likely to be fulfilled in analyzing the trend of the Swiss franc than in analyzing other currencies.
What are the attributes of the mainstream FX currency pairs?
1. The risk-off attribute of mainstream foreign exchange currency pairs: The risk-off attribute of a currency also refers to its value preservation, which means that it is not susceptible to political, war, market fluctuations and other factors, and avoids volatility risks to the greatest extent. It is stable and not easy to depreciate, but it is not absolutely immune to depreciation.
Gold and the yen are usually used as hedging tools, while the dollar has hedging properties, but usually do not do hedging tools.
2. Commodity attributes of mainstream foreign exchange currency pairs: Commodity attributes of currencies refer to the close connection with the prices of bulk commodities.
Canada and Australia are rich in oil, minerals and other commodities.
Its currency attribute is positively correlated with commodity trend.
3. Risk attributes of mainstream foreign exchange currency pairs: Currencies that are usually highly volatile against the US dollar or other major currencies can be regarded as high-risk currencies, and the most common high-risk currencies are emerging market currencies, because they will suddenly depreciate sharply in some cases.
4. The high interest attribute of mainstream foreign exchange currency pairs: the interest rate of the country where the currency belongs is relatively high, which may attract investors to do the spread trade in foreign exchange transactions.
5. Straight currency pairs: A currency pair related to the US dollar is a straight currency pair.
For example, USD/ yen (USD/JPY), EUR/USD.
Cross currency pairs: Currency pairs that do not involve the US dollar are cross currency pairs.
Such as the euro versus the yen (EUR/JPY).
Therefore, it is not difficult to find that the mainstream currency pairs of foreign exchange are mainly direct currency pairs.
How to choose a currency pair for hedging?
There are two kinds of hedging: 1. Lock in losses.
For example, when you do more than one hand of euro, the euro fell sharply, short one hand of euro, then you lock the loss at this time, which is not worth the loss, only novices will do so, professionals are very disgusted.
2. Lock in profits.
For example, when the euro goes long at 1.2000, the target is 1.2300, and then the euro goes to the pressure of 1.2100, then the euro will inevitably have a pullback, but it will not change the trend. Therefore, most of the euro will stay in the field, but short at the pressure of 1.2100, and leave the field when the euro goes back to a certain point to earn some pullback.
So that’s locking in profits and increasing revenue.
Do not do this unless you are well versed in the position of pressure support.
