Base Currency
The first currency listed in a forex pair, representing one unit against which the quote currency is measured.
What is Base Currency?
The base currency is the first currency in any forex pair. It’s always equal to one unit.
Example: EUR/USD
In EUR/USD = 1.0850:
- Base currency: EUR (first)
- Quote currency: USD (second)
- Meaning: 1 EUR = 1.0850 USD
Trading Implications
When you BUY EUR/USD:
- You’re buying EUR (base)
- You’re selling USD (quote)
When you SELL EUR/USD:
- You’re selling EUR (base)
- You’re buying USD (quote)
Currency Strength Connection
On our Currency Strength Meter:
- If base currency is STRONG and quote is WEAK → Pair likely to RISE
- If base currency is WEAK and quote is STRONG → Pair likely to FALL