Understand both sides of the pair.
Read currency pairs and quote conventions, then connect them to the price movement on a chart.
A currency pair expresses one currency in terms of another. Reading the pair in the correct order is the first step toward understanding what a rising or falling line actually describes.
A few things to understand first
Identify the base and quote
In the usual market convention, the first currency is the base and the second is the quote. For EUR/USD, that means euros are expressed in U.S. dollars. A hypothetical quote of 1.1000 represents 1.10 U.S. dollars for one euro.
Notice the order
Changing the order changes the meaning of the number. EUR/USD and USD/EUR describe reciprocal relationships. Always read the full symbol when comparing charts or learning from an example.
Check the instrument
Spot and futures markets can use different quote conventions. Retail over-the-counter forex also involves the dealer’s own trading conditions. Pair notation explains the quote; it does not explain fees, leverage, or counterparty risk.
Source: CME Group: Understanding FX quote conventions. Retail trading context: CFTC’s introduction to OTC forex risks.
Build the foundation with our guide to reading a chart. Examples are educational; they do not establish what a market will do next.
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