The overlooked currency pairs list
Since most emerging markets have super high spreads and gaps and slippages are not rare, we will focus more on cross pairs or minor currency pairs often ignored by Forex traders. Among the top contenders are:
- EUR/CHF - Euro vs. Swiss Franc
- AUD/NZD - Australian Dollar vs. New Zealand Dollar
- CAD/JPY – Canadian Dollar vs. Japanese Yen
- EUR/NZD – Euro vs. New Zealand Dollar
- GBP/CAD – British Pound vs. Canadian Dollar
Each of these pairs has its distinct characteristics and fundamental drivers, which are crucial to understand before you can trade these pairs.
EUR/CHF
The Euro Swiss Franc minor currency pair is one of the most stable cross pairs because Switzerland’s central bank (SNB) actively monitors excessive franc strength. The Eurozone provides large liquidity to this pair, making it pretty tradeable for even beginners. However, when compared to major pairs, EUR/GBP still has lower liquidity as it historically moves in tight ranges, as interest rate environments in Switzerland and the EU are mostly similar, and the SNB always employs stabilizing policies. Since the CHF is a safe-haven currency, when global recessions and crises hit, the inflow of investments drives the CHF higher, supported by interventions from the SNB. The pair is heavily influenced by Eurozone inflation and overall economic data.
Why EUR/CHF is overlooked
The pair often moves very slowly, which makes it fairly unattractive to day traders who seek momentum. However, the pair is ideal for mean-reversion strategy traders.
AUD/NZD
AUD/NZD is the second entry in our overlooked currency pairs list. Both Australian and New Zealand economies are close trading partners, and the pair reacts cleanly to shifts in commodity prices and interest rate differentials from the RBA and the RBNZ. The pair has the strongest reaction to rate changes. Since both central banks are very transparent about their policies, AUD/NZD trends are mostly predictable, which can be used by traders to increase their chances of success. New Zealand’s economy depends heavily on dairy, and Australia relies more on metals like iron ore. When dairy prices and metal prices move in different directions, AUD and NZD can separate and create long-lasting price trends in the AUD/NZD cross pair.
Why is AUD/NZD overlooked?
The pair is often considered a boring regional pair with limited price movements despite consistent trends, making it often unattractive to retail FX traders.
CAD/JPY
Among the most overlooked currency pairs, the CAD/JPY is distinct because it correlates with oil prices. This pair reflects the contrast between its two constituent pair economies, of Canada’s resource-driven economy and Japan’s safe-haven status, with the latter being a low-yielding currency. Canada is a leading oil exporter, while the yen often strengthens during risk-off periods, creating clear directional trends. The pair has very strong reactions to global equity and bond market shifts, as the yen often acts as an attractor for investors in difficult times.
Why overlooked
Many traders prefer USD/JPY because it offers more liquidity and more volatility. However, they miss many clean trends by doing so.
EUR/NZD
EUR/NZD is a volatile cross-pair that offers large price swings due to contrasting economic structures. The euro has a global influence, while New Zealand has an economy mostly dependent on agriculture and commodities, creating sharper moves in price. When we look at historic data, New Zealand usually had higher interest rates than Europe, making carry-trade and rate-driven price fluctuations a common occurrence. This interest rate differential is a very important factor to analyze whenever trying to speculate on this pair. By evaluating who has higher rates, together with New Zealand’s current commodity and agriculture sectors, it becomes much easier to determine which currency is stronger in EUR/NZD pairs.
Why EUR/NZD is overlooked
The pair has limited media coverage from major outlets, coupled with higher volatility, which makes it riskier for beginner traders.
GBP/CAD
GBP/CAD combines the volatility of the pound sterling with Canada’s oil-sensitive currency. UK political and economic news produces strong volatility, which is good for experienced traders but riskier for beginners. Add to this GBP volatility the oil trends, which amplify or reverse moves, and we have a pretty volatile currency pair.
Why avoided
The reason here is the same as with most overlooked currency pairs; spreads on GBP/CAD are higher than other pairs. The pair also experiences sharp intraday movements, which usually scares away beginner traders.
Why traders miss overlooked currency pair opportunities
As we have seen, each overlooked pair has its own unique and shared reasons why traders are not focusing on these pairs. There are several other reasons why traders often ignore cross-pairs. The main bias is towards USD pairs. Many online educational resources and video content mostly focus on major pairs, especially the EUR/USD, and beginners often have trading demo experience in this pair. As a result, they prefer to learn to trade only 1-2 pairs, and EUR/USD is usually a higher priority among their list of trading instruments. Since most content is about major USD pairs, there is less marketing dedicated to minor pairs, as brokers often promote major pairs more, so traders naturally opt for these few major pairs. For some traders, minor pairs are not popular currency pairs worth trading, due to higher spreads and less educational content explaining how these pairs work. Strong movements in these pairs often come from regional economic news, which beginners do not track, making these price swings random and unpredictable for beginner traders.
Advantages of the most overlooked currency pairs
Underrated forex pairs have their own distinct advantages. These benefits often include lower correlation with other major pairs, making them suitable for diversification. Since cross pairs do not include USD, traders avoid USD-driven volatility and gain exposure to entirely new markets, which do not reflect the US economic data.
Often, overlooked currency pair opportunities can be detected more easily because these pairs offer cleaner technical patterns. With fewer participants, manipulation and sudden spikes are often reduced, meaning less noise for the trader. Despite this, there is still volatility around regional news. Central bank decisions from Canada, Switzerland, or New Zealand often create strong and tradable price moves, which can be captured by experienced traders. As a result, these cross-pairs often provide unique opportunities and trading setups that major pairs do not offer. Commodity-linked or region-specific trends usually deliver clear setups unavailable in USD pairs. These pairs enrich traders’ experience and add more possible setups to the mix, which makes it possible to open multiple trading positions each trading day, which is suitable for intraday traders and scalpers.
Key economic factors behind overlooked currency pair opportunities
Each cross pair has its own personality, which is usually shaped by regional economic factors. Main drivers are similar to those of major paired economies, including inflation, employment data, trade balance, exports, central bank interest rates, and so on.
Inflation and employment data
Inflation is the most impactful news for any currency pair, including minor pairs. If inflation figures are worsening for one currency in the cross pair, then another will gain the upper hand, leading to multi-month trends, which can be exploited by traders to generate steady profits.
Trade balance and export performance
Trade balance and export performance are vital for currencies which are for economies heavily dependent on exports or imports. For example, Canada is a major oil exporter, and when the prices worsen for oil, its currency will suffer.
Commodity prices
This is especially important for currencies dependent on various commodities. CAD and NZD are the most obvious examples, heavily influenced by news about oil and iron ore, and other metals.
Central bank interest rates
Central bank rate decisions constantly cause sharp price movements and should not be overlooked by traders. If inflation rises above central bank target levels, the bank will then raise rates, which causes the currency in question to strengthen against other currencies.