The 10 Most Stable Forex Pairs to Trade in 2024

Are you considering diving into Forex trading in 2024 but worried about the risks? You’re not alone!

Many beginners face the dilemma of choosing which currency pairs to trade to minimize losses and maximize gains. Fortunately, not all pairs are equally volatile. Some are known for their stability, making them ideal for newcomers. 

In this guide, prepared by the JustMarkets team, we’ll reveal the top 10 most stable Forex pairs you should consider trading in 2024, especially if you’re in Malaysia where there’s a keen interest in mastering Forex trading effectively and safely. Ready to find out which pairs made the list? Let’s get started!

The Meaning of Stability in Forex Trading

In the Forex market, stability refers to how consistently a currency pair behaves. Stability isn’t just about low volatility. It’s also about predictability and gentle fluctuations that make a currency pair easier to manage for traders, mainly beginners. A stable currency pair typically exhibits:

• High Trading Volume

More trading activity means more liquidity, making entering and exiting trades easier without affecting the price too much.

• High Liquidity

A liquid market is one where transactions can be executed swiftly and with minimal price slippage. When you can easily open and close trades at favorable prices without gaps.

• Low Volatility

While some volatility is necessary for making profits, excessive volatility can be risky. Stable currency pairs tend to have fewer and smaller price spikes.

Understanding these aspects helps traders, particularly those in Malaysia keen on technical analysis, navigate the Forex market more effectively. Knowing which pairs exhibit these qualities can lead to safer and potentially more profitable trading decisions.

Stability of Different Forex Pairs’ Categories

Currency pairs in the Forex market are categorized into three main types: Majors, Minors, and Exotics. Each category has distinct characteristics that affect their stability and trading dynamics:

Majors

These pairs involve the US Dollar paired with other major currencies like the Euro, British Pound, or Japanese Yen. Examples include EUR/USD, GBP/USD, and USD/JPY. Majors are the most traded currency pairs in the world, offering high liquidity and lower spreads. Their widespread trading results in higher stability, making them a preferred choice for both novice and experienced traders.

Minors

Also known as cross-currency pairs, Minors do not include the US Dollar but involve other major currencies. Examples are EUR/GBP, GBP/JPY, and EUR/AUD. While these pairs have decent trading volumes, they are less liquid and slightly more volatile than Majors, but still provide reasonable stability for trading.

Exotics

These pairs include one major currency and one currency from a developing economy, such as USD/TRY (Turkish Lira) or EUR/ZAR (South African Rand). Compared to majors and minors, exotics are characterized by lower liquidity and higher volatility. This can lead to larger price swings and wider spreads, making them less stable and riskier for trading.

The Malaysian currency, the Ringgit (MYR), is typically considered an exotic currency in the Forex market. 

This classification is due to its pairing often with a major currency, like the USD/MYR, and its relatively lower trading volume and liquidity than major and minor currency pairs. Exotic pairs like USD/MYR are less commonly traded on the global Forex market, which can lead to higher volatility and wider spreads than more frequently traded major and minor pairs.

List of 10 Most Stable Pairs for Trading

Here’s a detailed list of the top 10 most stable currency pairs for 2024. We tried to highlight their stability factors and any significant correlations:

EUR/USD – The most traded currency pair globally, EUR/USD boasts immense liquidity and low spreads. It often becomes volatile based on economic announcements from Europe and the U.S. This pair has a positive correlation with GBP/USD and a negative correlation with USD/CHF.

GBP/USD – Known as the “Cable,” this pair is highly liquid and mirrors the dynamic between the British and U.S. economies. It correlates positively with EUR/USD and negatively with USD/CHF. 

USD/JPY – As the second most traded currency pair, USD/JPY offers high liquidity, especially during Asian and North American trading sessions. It generally has positive correlations with USD/CAD and USD/CHF due to the USD being the base currency.

USD/CAD – The “Loonie” is influenced significantly by oil prices due to Canada’s large oil exports, which negatively correlate with other major pairs like GBP/USD, AUD/USD, and EUR/USD where the USD is the quote currency.

AUD/USD – This pair is sensitive to changes in gold prices and general commodity trends because of Australia’s significant export profile. It tends to negatively correlate with USD/CAD, USD/CHF, and USD/JPY.

USD/CHF – Known as the “Swissie,” this pair is considered a safe haven due to Switzerland’s stable economic and political environment. It generally moves inversely to EUR/USD and GBP/USD.

EUR/JPY – This cross pair is popular for its stability and liquidity, driven by the economic interplay between Europe and Japan. It tends to follow broad economic trends affecting either the Eurozone or Japan.

NZD/USD – The “Kiwi” is relatively stable, influenced by New Zealand’s agricultural and trade activities. It has a positive correlation with AUD/USD due to similar economic structures.

EUR/GBP – This pair represents a major cross within Europe and is influenced by the relative economic strengths of the Eurozone and the United Kingdom. It’s less volatile but can experience movements based on regional economic news.

USD/CNY – An emerging stable exotic pair due to China’s growing economic influence and control over its currency. While not as liquid as the majors, it offers stability from China’s large reserves and managed float regime.

What About the Malaysian Ringgit?

The Malaysian Ringgit (MYR) is not typically categorized among the most stable currencies for Forex trading, primarily due to its classification as an exotic currency. The Ringgit’s stability and trading volume are considerably lower than those of major currency pairs.

The MYR’s fluctuations are often influenced by Malaysia’s economic indicators such as export data, commodity prices (particularly palm oil and electronics), and political stability. While it doesn’t match the liquidity or trading volumes seen in major currency pairs, it offers unique opportunities under specific market conditions.

For traders interested in the Malaysian Ringgit, it’s important to understand the regional economic trends and Malaysia’s central bank policies. This deeper understanding helps in navigating the potential volatility and planning trades that capitalize on predictable economic patterns specific to Malaysia.

How to Trade Stable Currencies?

Trading stable currency pairs requires a disciplined approach with a strong emphasis on risk management and market analysis. Here are some strategies traders can consider:

• Trend Following

Stable pairs often exhibit clear trends that can be followed using technical indicators. Tools like moving averages or MACD (Moving Average Convergence Divergence) can help identify these trends.

• Range Trading

Because stable pairs tend to have lower volatility, they often trade within well-defined ranges. Identifying support and resistance levels can allow traders to buy low and sell high within these ranges.

• News Trading

Even stable pairs can experience volatility around economic announcements or geopolitical events that impact their underlying economies. Keeping an eye on economic calendars and trading based on news can be a viable strategy.

We at JustMarkets can help you with this stuff. For example, we provide access to real-time charts and a suite of technical indicators to help you make informed trading decisions. We also have an economic calendar to update traders on upcoming economic events that could affect currency pair movements.

From beginner to advanced levels, JustMarkets offers tutorials and webinars that cover various aspects of Forex trading, including how to trade stable currency pairs effectively.

Embrace Stability, Malaysia!

Choosing stable currency pairs is crucial for beginner traders as it helps mitigate risk and provides a smoother trading experience. Practicing on demo accounts offered by JustMarkets allows traders to get accustomed to market conditions and develop effective trading strategies without risking real money.

Explore the extensive educational materials on JustMarkets and open a demo account to start your trading journey today, risk-free. Get hands-on experience with stable currency pairs and build your confidence in the Forex market.