Are you one of the many beginners in online trading who are struggling to understand even the basics of the markets? Don’t worry, we know the feeling. One of the most common reasons why people hesitate to start trading is due to the seemingly complex definitions and processes of CFD trading. We’re here to help you realize that it’s not that difficult after all. Once you understand the basics of trading in the global markets, it is up to you to further boost your skills and knowledge.
This article will give you the ins and outs of the Forex Market as it is the biggest financial market in the world and we will take a look at some of the most trending currency pairs to look out for in 2022.
5 facts about the FX market:
- The Forex market is 27 times bigger than the stock market!
- It is open 24 hours a day, five days a week.
- Trillions are traded daily.
- Forex does not have a central currency exchange market.
- Among the financial markets, it has the highest liquidity.
What does Forex Trading mean?
In simple terms, forex trading refers to a market where buyers and sellers exchange currency at an agreed-upon price. Since the rise of online trading, you can now take advantage of forex price movements using derivatives like CFD trading.
Forex pairs consist of two currencies: a base currency and a quote currency. When trading forex, you are always selling one currency in order to buy another, which is why forex is quoted in pairs - the price of the forex pair represents what one unit of the base currency is worth in the quote currency.
It is important to keep in mind that the forex market can be affected by a variety of factors such as central banks, news reports, economic data and events, and market sentiment. This is what makes this market so volatile as price fluctuations are strongly driven by supply and demand.
Trending FX pairs in 2022
As the first two quarters of 2022 have already gone by, traders have experienced a multitude of market trends and record-breaking price fluctuations. Let’s take a look at some of the most trending currency pairs of this year.
- USD to EUR. The United States Dollar (USD) is the most widely traded currency in the world since it is the world's most dominant reserve currency and the currency of the world's largest economy. The European Union's euro (EUR) is the second most dominant currency, making this pair the most liquid and by far the most dominant in terms of taking up most of the market's action. The USD/CHF tends to negatively correlate with this pair, while the GBP/USD tends to positively correlate.
- USD to JPY. USD and JPY are the second most popular pairs for trading. As this pair tends to reflect what the political climate is between these two giant economies at any given moment, it is more sensitive than others. There is a tendency for this pair to correlate positively with USD/CHF and USD/CAD.
- USD to CAD. This pair is known as the “loonie” and it’s comprised of two of the most powerful economic neighbors in the world. It tends to be negatively correlated with the AUD/USD, GBP/USD, and EUR/USD.
- AUD to USD. A currency pair commonly known as "Aussie" has negative correlations to the USD/CAD, USD/CHF, and USD/JPY. Australia is the world's largest coal and iron ore exporter, so the currency's movement is heavily influenced by commodity prices.
Are you ready to Trade the Trend with XPro Markets?
By logging in to your trading account, you immediately have access to every asset class, ranging from forex, stocks, commodities, indices, and crypto futures. Depending on your trading strategy, you have the opportunity to choose the best market for your goals.
If you’re interested in becoming part of the bustling community of online traders, get started by learning more about this market through educational resources and keeping up to date with every economic event.
