Understanding major currency pairs: EUR/USD, USD/JPY and more

The foreign exchange (forex) market is the largest financial market in the world. According to the 2025 Bank for International Settlements Triennial Survey, average daily OTC forex turnover reached $9.6 trillion in April 2025. At the center of this market are currency pairs, and understanding how they work is the first step toward reading global macro trends.

Currencies always trade in pairs because buying one currency means selling another at the same time. For crypto-native traders expanding into forex, understanding major currency pairs can make it easier to read USD strength, follow macro trends and identify periods of higher market volatility.

Key takeaways:

• Major currency pairs include the US dollar on one side and are among the most liquid instruments in the forex market.

• Their price movements are mainly shaped by central bank policy, economic data, interest rate expectations and market risk sentiment.

• For crypto traders, understanding USD strength and forex market cycles can add useful macro context when analyzing Bitcoin and other digital assets.

What is a currency pair and how does it work?

A currency pair is a price quotation showing the value of one currency relative to another. Every pair has two components: the base currency (listed first) and the quote currency (listed second).

In EUR/USD, the euro is the base and the US dollar is the quote. A price of 1.0850 means one euro costs 1.0850 US dollars. When you buy EUR/USD, you're buying euros and selling dollars simultaneously.

A few core concepts to know:

• Bid/ask spread: the gap between the buy and sell price. Tighter spreads mean higher liquidity and lower trading costs.

• Pips: the standard unit of price movement. For most pairs, one pip equals 0.0001. For JPY pairs, one pip equals 0.01.

• Categories: forex pairs are grouped into majors (include USD, highest liquidity), minors or crosses (no USD, moderate liquidity) and exotics (one major currency paired with an emerging market currency).

The seven major currency pairs

Major currency pairs all include the US dollar on one side, making them among the most liquid and widely traded instruments in the forex market. The USD appears on one side of 89.2% of all forex trades according to the 2025 BIS survey, which is why these pairs carry the deepest liquidity and tightest spreads.

Each major pair has its own personality, shaped by distinct economic relationships.

EUR/USD is the most traded pair in the world, representing approximately 23% of daily forex volume. It reflects the policy divergence between the European Central Bank (ECB) and the US Federal Reserve. Because of its deep liquidity and tight spreads, EUR/USD is a natural starting point for traders new to forex.

USD/JPY is sensitive to US Treasury yields and Bank of Japan policy. The Japanese yen is a safe-haven currency that tends to strengthen during periods of market stress as investors unwind risky positions.

GBP/USD, nicknamed "Cable," is one of the more volatile major pairs. It responds to Bank of England rate decisions, UK inflation data and political developments.

USD/CHF pairs the dollar with the Swiss franc, another safe-haven currency. It tends to move inversely to EUR/USD given Switzerland's close economic ties with the eurozone.

AUD/USD is commodity-linked. Australia exports large quantities of iron ore and coal to China, so this pair is sensitive to Chinese economic data and commodity prices.

USD/CAD, the "Loonie," has a strong correlation with crude oil prices. Canada is a major oil exporter to the United States, so rising oil prices typically support CAD.

NZD/USD, the "Kiwi," shares many characteristics with AUD/USD but tends to carry wider spreads due to New Zealand's smaller economy.

The traditional seven-pair framework is also evolving as renminbi trading grows, reflecting China's expanding role in global trade and finance.

What moves major currency pairs

Several interconnected forces drive price movement. Understanding these helps traders anticipate macro volatility.

Interest rate differentials are the most powerful long-term driver. When the Fed raises rates while the ECB holds, capital flows toward USD-denominated assets seeking higher yields, pushing EUR/USD lower.

Economic data releases cause the most immediate volatility. Non-Farm Payrolls (NFP), CPI, GDP and PMI readings can move major pairs sharply within seconds of release.

Central bank communications (forward guidance, press conferences and policy statements) shift market expectations about future rate paths. A single phrase from a central bank official can reprice a pair significantly.

Geopolitical events such as conflicts, elections and trade disputes trigger safe-haven flows toward USD, JPY and CHF.

Risk sentiment creates a recurring rotation: "risk-on" environments favor commodity currencies (AUD, NZD, CAD), while "risk-off" pushes capital toward safe havens (USD, JPY, CHF).

Major pairs compared

The table below summarizes the key characteristics of the four most commonly traded major pairs. Figures are approximate and may vary depending on market conditions, liquidity and platform pricing.

EUR/USD is often the natural starting point for new forex traders because of its deep liquidity, tight spreads and relatively predictable session behavior. USD/JPY and GBP/USD suit traders who are comfortable with faster-moving price action and larger daily ranges.

Trading sessions and when major pairs are most active

Forex operates 24 hours a day, five days a week, rotating through four major sessions.

• Sydney (22:00–07:00 UTC): AUD/USD and NZD/USD most active. Lower overall volume.

• Tokyo (00:00–09:00 UTC): USD/JPY dominates. JPY crosses see peak liquidity.

• London (07:00–16:00 UTC): the highest-volume session (~35% of daily turnover). EUR/USD and GBP/USD are most active here.

• New York (12:00–21:00 UTC): USD pairs see peak volatility. The London/New York overlap (12:00–16:00 UTC) is the most liquid window of the entire trading day.

Session timing matters because spreads widen during low-liquidity hours and major economic releases are scheduled around session opens. Knowing when your target pair is most active helps you trade during tighter spreads and more reliable price action.

Major pairs vs. minor pairs and exotics

Beyond the majors, the forex market offers different levels of exposure. 

Minor pairs (crosses) don't include the US dollar. Examples include EUR/GBP, EUR/JPY and GBP/JPY. They offer moderate liquidity with slightly wider spreads. A trader using EUR/JPY, for instance, gets pure exposure to ECB vs. Bank of Japan policy without USD-specific noise.

Exotic pairs combine a major currency with an emerging market currency. Examples include USD/TRY (Turkish lira), USD/ZAR (South African rand) and EUR/PLN (Polish zloty). These carry wide spreads, high volatility and significant overnight swap costs.

For beginners, majors are the clearest starting point. Crosses become useful once you can read currency dynamics across two non-USD economies. Exotics suit experienced traders comfortable with higher costs and political risk.

Trading major currency pairs on Bybit TradFi

On Bybit TradFi, eligible users can access forex CFDs on major pairs such as EUR/USD, GBP/USD and USD/JPY using USDT as margin. This allows crypto-native traders to explore forex without opening a separate broker account or converting funds to fiat first. For a step-by-step walkthrough, see How to trade gold & FX with USDT on Bybit TradFi.

Forex CFDs allow you to speculate on price movements without owning the underlying currency. If you expect EUR/USD to rise, you open a long position; if you expect it to fall, you go short.

There's also a practical connection between forex and crypto markets. The US Dollar Index (DXY), which tracks USD strength against a basket of major currencies, often shows an inverse relationship with Bitcoin, especially during periods of tightening liquidity or risk-off sentiment. This means watching EUR/USD or DXY alongside Bitcoin can provide early signals about macro conditions that affect digital assets.

For those starting out, EUR/USD is the recommended first pair. It has the tightest spreads, most predictable session behavior and deepest liquidity. From there, USD/JPY adds exposure to yield dynamics, while GBP/USD introduces higher volatility around UK economic events.

Risks to know

Because forex CFDs are leveraged products, traders should understand margin requirements, liquidation risk and market volatility before opening a position. If adverse price movements reduce your account equity below the required margin level, the platform may automatically close one or more positions through margin closeout. Leverage can amplify both gains and losses, so position sizing and risk management are essential.

Key risks to be aware of:

• Leverage amplifies losses as much as gains. A small adverse move can result in significant losses relative to your margin.

• Economic data surprises can cause fast, unpredictable moves that may gap through stop-loss orders.

• Central bank interventions (particularly from the Bank of Japan and Swiss National Bank) can trigger sharp, sudden repricing.

• Overnight and weekend risk. Positions held across sessions or weekends may gap at the open.

Always use position sizing appropriate to your risk tolerance and never trade with capital you can't afford to lose.

The bottom line

Major currency pairs are the entry point to the world's most liquid market. Understanding what they are, what drives them and when they're most active gives you a practical framework for reading global macro conditions, not just in forex but across asset classes including crypto.

For crypto-native traders, the transition doesn't require starting from scratch. Technical analysis skills, risk management habits and a 24-hour mindset all transfer directly. What forex adds is a macro calendar, a clear set of economic drivers and access to deep institutional liquidity. If you're new to TradFi terminology, the TradFi Dictionary covers 16 key terms to help you get started.

Ready to explore? Start with EUR/USD on Bybit TradFi and build your macro trading foundation from the world's most traded pair.

Forex CFDs involve significant risk. Leverage can amplify both gains and losses. Past performance is not indicative of future results. Please ensure you understand the risks involved and only trade with capital you can afford to lose.

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