Forex trading can be challenging for beginners who do not know which currency pairs can offer the most lucrative opportunities. However, you can find profitable trades by developing a good understanding of the forex market and exploring the types of currency pairs.
If you are looking for the best currency pairs to trade in India, you are in the right place. But before we get into that, let us understand the concept of currency pairs in forex.
What is a ‘Currency Pair’ in Forex Trading?
Foreign Exchange or Forex involves a simultaneous exchange of one currency for another. For example, if you spend Rs 8285.25 today to buy 100 USD at the rate of Rs 82.85 per dollar, you have just conducted an INR/USD trade.
This is known as a ‘currency pair’. Broadly, there are three types of currency pairs in Forex- major pairs, minor pairs and exotic pairs. So what are the five best currency pairs to trade in India? Let us find out.
5 Best Currency Pairs to Trade in India
Now that you have an understanding of what are currency pairs and how important they are in Forex, let us discover the 5 best currency pairs to trade in India.
- EUR/USD
Euro/US dollar is the most popular currency pair with a low spread and high liquidity in Forex. The exciting part about this currency pair is that it is not very volatile. So if you are a trader who prefers trading with low risk and easy prediction, EUR/USD is the combo to go for.
- GBP/USD
British Pound/Us dollar is the oldest trading pair that exhibits a straightforward and clear price action. Forex traders who are great at technical analysis and like to do their research can go for this, as a lot of market analysis information for this pair is available online.
- USD/JPY
US dollar/Japanese Yen is another popular currency pair due to its low spread, more liquidity and smooth trend when compared to other pairs. Both are stable and reserve currencies, but keep in mind that economic events in US and Asia can lead to changes in the value of the pair.
- AUD/USD
The Australian Dollar/US Dollar is a pair that changes in value as per the growth or decline of the Australian economy. Australia is a large producer of commodities. Thus, their price can directly impact the value of this currency pair, making it a great choice for commodity traders.
- USD/CAD
US Dollar/Canadian Dollar is a highly liquid and popular pair to trade in India. The price of this currency pair is negatively correlated to crude oil cost, thus making it a little volatile. Traders who are looking to profit from the indirect exposure to variations in crude oil prices can choose this pair.
All of these pairs are available to trade on reputed trading platforms like Dhan.
Conclusion
Forex trading involves trading one currency for another. Traders make a profit when the currency they acquire rises in value. Therefore it is essential to know the types of currency pairs. To get you started, here we also talked about the 5 best currency pairs to trade in India.
