Currency pairs explained
Currency pairs are the building blocks of forex: you always buy one currency while selling another, and the pair's price is simply the exchange rate between them.
Base and quote currency
In EUR/USD, the first currency (EUR) is the base and the second (USD) is the quote. The price — say 1.0850 — is how many units of the quote it takes to buy one unit of the base. Buy the pair if you think the base will strengthen; sell it if you think it will weaken.
Majors, minors and exotics
- Majors — pairs with the US dollar and a major economy: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD. Tightest spreads, most liquidity.
- Minors (crosses) — majors without the dollar: EUR/GBP, EUR/JPY, GBP/JPY.
- Exotics — a major paired with a smaller economy's currency; wider spreads, bigger swings.
How a pair moves
Price change is measured in pips. EUR/USD rising from 1.0850 to 1.0870 is a 20-pip gain for a buyer.
What FxErvin covers
Our signals cover the major and minor pairs — plus metals, crypto, commodities and stocks. See how to read a signal to start trading them.