The 28 Major Forex Pairs - What you need to know about Forex Pairs

When you dive into the world of trading, specifically forex trading, the first thing you will probably hear about is forex pairs. And you'll probably wonder if there's such thing as the "best forex pair to trade".

Not sure about you, but that's all I kept thinking off on the first day of my trading research back when I first got started. And it drove me crazy because there was so many pairs to choose from. 

Don't worry though, that's what this blog is for. We'll go over: 

1. What is a forex pair 
2. What are the major forex pairs 
3. Which Forex Pair is the best to trade. 
4. How to trade them.

1. What is a Forex Pair 

It's exactly what it sounds like! 

A 'pair' is made up of two currencies. Let's take the USD currency and the JPY currency, when we put them together, they are what's known as a pair, the USD/JPY (One of the most popular pairs). The one thing to understand about currencies is that it’s very difficult to assess their value in isolation. However, by comparing one currency to another, we can judge how strong or weak it is. For instance, when we have a pair like USD/JPY, this Forex pair tells us how strong the USD is in comparison to the JPY.

It’s like getting your report card in school—you don’t really know how poorly you performed until you compare your result with someone like Tom (the kid who reminds the teacher there was homework due).

Anyway, your next question might be: could this be called JPY/USD instead of USD/JPY? The short answer is no. For the more detailed explanation, check out this page where it’s broken down further.

Don’t worry, though—I’ll give you a list of the major Forex pairs later, so you can avoid running into this conundrum.

2. What are the major forex pairs?

a. The Big Boys.

Now that we know it’s never a good idea to compare grades with Tom, but sadly, that's what forex essentially is. So let’s first look at who the big boys are in the Forex world— what we call the Major Pairs.

And here they are:

As you can see, we have EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, and NZD/USD. You’ll quickly notice that they all have one currency in common: the USD. The reason they’re regarded as the Major Pairs is that they are the most liquid pairs in the market, which means a couple of things:

They have higher stability.
Their spreads are generally much lower.

The main reason for this is the role of the USD. Factors such as the USD being the world’s reserve currency, the U.S. Federal Reserve’s influence as one of the most impactful central banks, and the United States’ massive economic power all set USD pairs apart from others due to their outsized role in the global economy and financial markets.

b. The Wild West

Calling them the "Wild West" might be a bit of an exaggeration, as there are still plenty of traders who trade these pairs. We call them the Cross Currency Pairs as well as the Exotic Crosses.

The Cross Currency Pairs include:

You’ll notice that these pairs do not include the USD. Historically, if you wanted to exchange one non-USD currency for another, you’d have to convert it to USD first and then to the desired currency. Cross pairs allow for direct exchange without the USD as an intermediary.

When people refer to the "28 Major Forex Pairs", they are typically referring to the Majors as well as the Crosses pairs you see from above. 

Then, you have the Exotic Crosses, which include:

These pairs typically involve currencies from countries with emerging or smaller economies. They generally have lower liquidity in the global Forex market.

3. Which Forex Pair is the best to trade. 

Now, that's the age-old question, isn’t it? Which forex pair will be the one to put me in retirement for good?

To answer this question, we first need to understand liquidity.

In the trading world—whether in stocks, crypto, or forex—liquidity refers to how easily an asset can be bought or sold at a given price. A liquid market generally comes with a few benefits:

a. Tight Spreads
If you're a scalper, this is crucial because a 1-2 pip difference in the spread can easily impact your risk-to-reward ratio by 25-50%.

b. Low Volatility
Lower volatility means you’re less likely to encounter sudden spikes or large gaps in the market, which can sometimes be risky for your trading.

c. Stability
Strategies that rely on technical analysis (like chart patterns) work better in liquid markets, as more participants contribute to clearer patterns and trends.

And guess which category of forex pairs are the most liquid?

The Forex Major Pairs.

4. How to trade them. 

You can give an F1 driver a Toyota Camry, and he'll still beat an ordinary driver in an F1 car in a race.

My point is this: it's less about which pair is likely to bring in the most return and more about how well you understand the market and deploy a strategy that can work with any pair—even the wild ones.

So, if you’re one of our Urban Forex students, you know it’s all about reading the price action between buyers and sellers. If you’re not yet a student, just pick up our free price action course. That’s pretty much the first step to becoming an excellent ‘F1 trader.’

Remember, it’s not about which currency pair you’re trading; it’s about how you’re trading them.

Conclusion 

Now, obviously, with what’s been said, you don’t want to trade a currency pair that’s not on the list above. Any one of the Major, Cross, or Exotic pairs are generally fine. All I’m trying to say is, don’t limit yourself to just one pair. With a robust strategy, you can easily approach all 28 forex pairs with ease.

So, without sounding like a hypocrite, what’s your favorite forex pair?