Forex Pairs Explained
Not all currency pairs are created equal. Learn which pairs offer the best liquidity, lowest spreads, and highest profitability for signal trading.
🌍 What Are Forex Pairs?
A forex pair shows how much of one currency you need to buy another.
Example: EUR/USD = 1.0850 means 1 euro buys $1.0850 USD.
- Base currency: EUR (first, always 1)
- Quote currency: USD (second, the price)
- Majors: Pairs with USD (70% of all trading)
- Best for signals: EUR/USD, GBP/USD, USD/JPY, XAU/USD
The 4 Major Forex Pairs
Major pairs account for 70% of all forex volume. They have the tightest spreads (0.1-0.5 pips) and best liquidity.
EUR/USD
Euro / US Dollar
Most traded pair globally. Nicknamed "Fiber". Moves on ECB and Fed policy. Tight spreads, best for beginners.
USD/JPY
US Dollar / Japanese Yen
Nicknamed "Gopher". Safe-haven flows during risk-off events. Tokyo session most active. Popular with scalpers.
GBP/USD
British Pound / US Dollar
Nicknamed "Cable". Most volatile major. Big pip moves = bigger profits (and losses). Sensitive to Brexit news.
XAU/USD
Gold / US Dollar
Gold priced in dollars. Safe-haven asset. Huge liquidity. Big moves during inflation fears or Fed announcements.
Minor & Exotic Pairs
Minor Pairs (Crosses)
Don't include USD. Lower liquidity, wider spreads (1-3 pips).
- •EUR/GBP: Euro vs Pound
- •EUR/JPY: Euro vs Yen
- •GBP/JPY: "The Beast" (high volatility)
Exotic Pairs
Include emerging market currencies. Spreads 5-20+ pips. AI PIPS avoids these.
- •USD/ZAR: Dollar vs Rand (South Africa)
- •EUR/TRY: Euro vs Lira (Turkey)
- •USD/MXN: Dollar vs Peso (Mexico)
Correlations: How Pairs Move Together
Some pairs move in sync, others move opposite. Understanding correlations prevents overexposure.
| Pair 1 | Pair 2 | Correlation | What It Means |
|---|---|---|---|
| EUR/USD | GBP/USD | +0.85 (Positive) | Move in same direction 85% of time |
| EUR/USD | USD/JPY | -0.75 (Negative) | Move in opposite directions |
| XAU/USD | USD/JPY | -0.60 (Negative) | Gold rises when USD weakens |
⚠️ Risk Management Rule
Don't take 3 signals on EUR/USD, GBP/USD, and EUR/GBP simultaneously. They're 80%+ correlated. If USD strengthens, all 3 go against you = triple loss.
Which Pairs Does AI PIPS Trade?
AI PIPS focuses on 4 high-liquidity pairs with institutional volume:
Why only 4 pairs? Focus beats diversification in signal trading. Our AI models are trained specifically on these pairs' behavior, giving us an edge.
Get Signals on the Best Forex Pairs
AI PIPS delivers 2-5 signals daily on EUR/USD, GBP/USD, USD/JPY, and XAU/USD. Institutional-grade analysis.
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Nightmare
Founder & Lead Trader
11+ years experience • FTMO Funded Trader