5 Most Volatile Forex Pairs To Trade (And How To Find Them)

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Are you looking for a profitable currency pair to trade today?

Let me ask you this:

Do you think that volatility in a currency pair is the key to success?

Well, let me tell you this:

There is no such thing as a “good” or “bad” currency pair.

All currency pairs have a unique story behind them.

So, if you want to find out which are the most volatile forex pairs to trade today, you’ll need to look at their volatility.

And in this, I’m going to show you exactly how you can easily add that to your trading analysis.

Let’s get started.

Why Would You Trade The Most Volatile Forex Pairs?

So you’re looking for volatile pairs to trade?

I get it, you heard about volatility creating more opportunities.

You see:

Currency pairs that are more volatile offer better opportunities for profit because of the price fluctuations can be more aggressive.

However, this is a two-way street.

Increased volatility can increase a trader’s risk, but with higher volatility assets – there is also a higher chance of larger profit potential.

Just like their stable counterparts, they are still affected by the same economic data flows – but the reason they are more volatile could be down to geopolitics and their economic strength.

For example, emerging countries like the BRICS (Brazil, Russia, India, China, and South Africa) are volatile currencies due to their exceptional growth and developments compared to “established” countries such as the United Kingdom.

A word of warning:

These are more volatile and the brokers KNOW this, so these currency pairs have wider spreads, higher margin requirements, and they do not want to take any risk on them (or the least possible).

This is fair because anything can happen in forex at any time, even dead certain things could reverse.

Just look at what happened when the Swiss Franc was capped against the EUR for the first time in 2015.

This news on a safe coin obliterated brokers — FXCM suffered $225m loss + thousands of clients were margin called heavily in the red.

This was ONLY the Swiss Franc…

How To Find The Most Volatile Forex Pairs

This is really easy.

You can look at your Forex list on your trading platform with an Average True Range indicator to pip point the larger moving currency pairs.

Or use a tool from https://uk.investing.com/tools/forex-volatility-calculator

This is a quick tool to accumulate the ATR over the past X amount of weeks.

Most Volatile Forex Pairs Tool Finder

It’s always good to view at least 10 weeks worth of data.

It can also show you further breakdowns by pip:

Most Volatile Forex Pairs Pip Tool

Do note:

There is the Gold and Silver crosses included, which you should ignore.

What’s The Most Volatile Forex Pairs In 2022?

Here is the list of the 5 most volatile forex pairs in 2022:

  1. USD/ZAR
  2. USD/BRL
  3. AUD/JPY
  4. NZD/JPY
  5. CAD/JPY

The data below is generated from the Investing.com Tool mentioned earlier and is calculated based on the previous 10 weeks of trading activities.

5. CAD/JPY

Average Daily Movement (Up or Down): 0.97%

This is the Canadian dollar crossed with the Japanese yen.

This is a commodity currency against a safe-haven currency, so they are both very sensitive to market sentiment.

The key thing to note is that the Canadian dollar reflects its oil exports, so any cuts in supply or demand will increase/decrease the CAD.

Because the oil itself is a volatile asset, this influences the Canadian dollar significantly.

Over the last 10 weeks, CAD/JPY has moved up and down an average of 0.97% per day.

4. NZD/JPY

Average Daily Movement (Up or Down): 0.99%

This is the New Zealand Dollar and the Japanese Yen cross.

Again, New Zealand is seen as a commodity-based currency just like CAD and AUD.

New Zealand’s exports are agricultural, such as eggs, wood, meat and dairy.

So the NZD is sensitive to these markets too.

Over the last 10 weeks, NZD/JPY has moved up and down an average of 0.99% per day.

3. AUD/JPY

Average Daily Movement (Up or Down): 1.11%

The AUD/JPY is the Australian Dollar crossed with the Japanese Yen.

This is a high volatility pair thanks to its inverse relationship.

Depending on the current economic climate, this pair can be particularly volatile due to the fact that the Yen is seen as a safe-haven asset (this means that investors rotate their funds to yen when times are tough).

Whereas the Australian dollar is seen as a risk-on approach when investors are looking to speculate and when the economic climate is strong.

Thus, this currency pair is sensitive to market sentiment changes.

This is a forex pair that correlates with the AUD/CHF as it has the same inverse relationship.

Over the last 10 weeks, AUD/JPY has moved up and down an average of 1.11% per day.

2. USD/BRL 

Average Daily Movement (Up or Down): 1.35%

This is the US Dollar and Brazilian Real currency cross.

This is a volatile currency pair due to the exciting growth of the economy as an emerging market. Therefore, many investors have an upbeat consideration for the Real.

However, Brazil has been politically unstable through corruption in government.

This naturally takes the shine away from the Brazilian currency and the efforts claimed by an upbeat emerging market.

Over the last 10 weeks, USD/BRL has moved up and down an average of 1.35% per day.

1. USD/ZAR

Average Daily Movement (Up or Down): 1.53%

The Most Volatile Forex Pair is the USD/ZAR.

This is the US Dollar crossed with the South African Rand.

The South African rand is also seen as a commodity currency because it is extremely sensitive to the price of gold.

This is because gold is South Africa’s main export, plus gold is valued in US dollars.

This gives us volatility because the strength or weakness of the USD is highly correlated with the fluctuation in the price of gold.

If you have an interest in trading gold, it would be good to monitor the price of ZAR too.

Over the last 10 weeks, USD/ZAR has moved up and down an average of 1.53% per day.

Overall:

As you can see from this list, the majority of the most volatile forex pairs are from commodity-based currencies against the safe-haven yen.

This would make sense as any jitters would cause an immediate rotation from risk-on to risk-off, this is a sharp transition of flow of money.

With the exception of the USD/BRL, which is due to the sharp economic growth Brazil are facing right now and it’s trying to find its footing on the world’s stage.

Which of the currency pairs should you trade?

It’s always up to you, there is never a real preference.

If you are clued up around the economies of these countries, then it might be worthwhile monitoring them and trading them.

Fundamentals play a significant part in all of the forex market, but when it comes to volatile pairs – you HAVE to be focused on it.

The day you miss an interest rate cut or hike on any of these pairs, could be a day you remember for a long time as the volatility will either accidentally cripple your account or send it sky-high.

Personally, I’d focus on the majors more.

As a retail trader it is more cost-effective (lower spreads), more liquid (instant match executions), and they can take a beating during market news and you will still be okay.

Not only that, brokers see the majors as less risk so you won’t have to put up a larger margin for the privilege to trade these exotic pairs.

Whereas with these volatile pairs, one bad news announcement could obliterate your trading position and raise a margin call.

Not worth the extra risk in my books.

At the end of the day, it’s all down to you – but I would say this:

Don’t look at how many pips these assets go up or down in one day.

Even though they may swing higher or lower during the day, the spreads in place to enter the trades make it difficult to take advantage of the movements.

Again, do your own research (like you are doing right now).

It’s the only way to get accustomed to the currency pairs in general in order to select which ones you want to focus on and trade.

Summary

In this article, I share the 5 most volatile forex pairs to trade today.

After reading this article, you’ll know which pairs to trade today and how to find them!

Lots of information to take away from this article.

How did you find it?

Let me know on social media.

Also, if you’re looking to improve as a trader, check out the following articles below:

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