Everything is relative in the forex market. The euro, by itself, is neither strong nor weak. The same holds true for the U.S. dollar. By itself, it is neither strong nor weak. Only when you compare two currencies together can you determine how strong or weak each currency is in relation to the other currency.
Currencies always trade in pairs. You never simply buy the euro or sell the U.S. dollar. You trade them as a pair. Some of the most well-known currency pairs are:
| EUR/USD | (Euro / U.S. dollar) |
| GBP/USD | (British pound / U.S. dollar) |
| USD/JPY | (U.S. dollar / Japanese yen) |
Investors, just like you, make money every day by trading currency pairs. By determining what is going to happen to a currency pair in the future, investors can act today to take advantage of coming price movements.
Currency pairs can do one of the following three things:
- They can go up
- They can go down
- They can go sideways
If you can determine which way a currency pair is going to move, you can become quite profitable.
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