Currency Pair

A currency pair is the quotation of one currency’s value in terms of another, written as BASE/QUOTE (for example EUR/USD), and it is the fundamental tradable unit in forex. The price shows how many units of the quote currency are needed to buy one unit of the base currency, so every position is inherently a bet on the relative strength of two economies, not one. Pairs fall into categories: majors are the most liquid and tightest-spread, typically involving the US dollar; minors (or crosses) pair major currencies without the dollar; and exotics combine a major with an emerging-market currency, carrying wider spreads and thinner liquidity. The choice of pair shapes your spread, volatility, liquidity, and overnight swap. Understanding the base/quote structure is the foundation for reading prices, sizing trades, and interpreting pip values.

In plain English — A currency pair is how forex prices are expressed: one currency measured against another, such as EUR/USD or USD/JPY. The price tells you how much of the second currency it takes to buy one unit of the first. Trading a pair always means simultaneously buying one currency and selling the other. Pairs are grouped into majors (involving the US dollar and the most-traded currencies), minors (major currencies without the dollar), and exotics (a major currency paired with a smaller-economy one).

If EUR/USD is 1.1000, it costs 1.10 US dollars to buy 1 euro. Buying EUR/USD means you are long euros and short dollars at the same time.