Is trading volatile Forex currency pairs risky? If you trade in Forex, you would love to get your hands on some trades that can assure you better opportunities to gain. Trading in Forex can be tricky because some currency pairs go up and down a lot. Traders want to find these pairs because they can make big profits or losses. This article will help you learn which currency pairs are the most unpredictable in 2024, why they are like that, and how you can find them

The Top Day Trading Currency Pairs of 2024

The nature of Forex compelled this study to focus on the volatility of the price, which measures the rate of price change. The higher the calculated value for a particular pair, the greater the fluctuations that it goes through and this brings about risks and opportunities to the traders thereby making it a volatile market. Here are the most fluctuating cross rates to focus on in 2024:

GBP/JPY (British Pound/Japanese Yen)

Why Volatile? This particular pair is volatile, especially because it includes both the British pound and the Japanese yen; the pair tends to be highly sensitive to changes in geopolitical threats, Brexit news and updates, and shifts in the economic policies of the two countries. This is because among Japan for having the most accommodating monetary policy for this year and the UK for its uncertain environment after Brexit, this pair has been a favorite among traders who enjoyed volatility.

USD/ZAR (US Dollar/South African Rand)

Why Volatile? The USD/ZAR pair is affected by factors ranging from political unrest in South Africa, economic commodities such as gold, and the decisions made in US interest rates. Being one of the emergent market currencies, the pair without a doubt is among the most unpredictable.

AUD/USD (Australian Dollar/US Dollar)

Why Volatile? This pair is very responsive to world prices of commodities and especially to the prices of Australian export items such as iron-ore and gold. However, nothing exerts as much pressure as risk shifts in the economy and data releases from China, Australia’s largest trade partner.

EUR/USD (Euro/US Dollar)

Why Volatile? Being the most liquid pair in the world it reacts to several factors including differential rates of interest on the Eurozone and US, differences in inflation rates as well as the growth rate of the two economies. The instability of the Euro is increased by the elements in the Eurozone, including debt problems and shifts in policy.

USD/TRY (US Dollar/Turkish Lira)

Why Volatile? Since the inflation rate has been high and political stability low together with the outbreak of unconventional monetary policies in Turkey, this has placed the Turkish Lira under pressure. It tends to have big up-and-down moves as investors respond to Turkey’s economic problems and regional conflicts.

NZD/USD (New Zealand Dollar/US Dollar)

Similar to the rate of AUD/USD, the rate of NZD/USD fluctuates influenced by the commodity, and New Zealand’s dairy in particular. It also reacts viciously to changes in risk-on-risk-off and economic indicators from both New Zealand and the United States.

How to Identify the Most Volatile Forex Currency Pairs

To determine the most volatile of the pairs, the characteristics of forex currency pairs have to be examined to understand from which they originate.
It is equally important to comprehend those currencies that experience high levels of fluctuation to trade effectively. Below are methods and tools that one can use to identify volatile Forex pairs:

Volatility Indicators

Average True Range (ATR): The ATR is an instrument of technical analysis, which defines the period average of oscillations between the high and low price rates of a pair of currencies. A higher ATR is equal to more fluctuations in the price of the security.
Bollinger Bands: Bollinger Bands are made up of an average line (simple moving average) and of two other lines that are parallel to the average line and also standard deviation apart from the middle line. When the bands extend at any given point, it shows that the price is walking a volatile path.

Economic Calendars

Other informational influences can be driven by new economic indicators including interest rate decisions, employment reports, GDP, and among others. Such events – informed by Forex Factory’s Economic Calendar – would enable those interested to track such events and know beforehand, when particular currencies are likely to exhibit relative volatilities.

News Feeds and Market Analysis

It is always important to monitor events happening around the world to enable you to predict events that are likely to cause shifts in particular currency pairs. Bloomberg, Reuters, and Investing. One of the features that com offers is the real-time news feeds which are highly relevant to Forex trading.

Volatility Reports

Some of them provide weekly or monthly volatility reports that give a list of the most volatile Forex pairs. You can find the currently available reports on websites like www.dailyfx.com and www.myfxbook.com, which help traders to a large extent.

Why Such Forex Currency Pairs Considered Volatile in 2024?

Economic, political, and global factors make the currency pairs mentioned earlier volatile in 2024.

Economic Uncertainty
The world economy is highly volatile at the moment, inflation is emerging as an issue alongside recession threats and an unbalanced economic recovery from Covid-19. Traders regard currency pairs like EUR/USD and GBP/JPY as the most volatile among these types of risks.

Geopolitical Tensions
Potential upheavals in the geopolitical landscape namely the war in Ukraine, the tariff war between the US and China, and political crises in certain emergent market economies contribute to more uncertainty in USD-derived pairs like USD/ZAR and USD/TRY.

Central Bank Policies
In general, central banks have a significant position in the shifting of currency volatility. Every one of the currencies combined in a currency pair reacts uniquely to the Federal Reserve raising interest rates, the European Central Bank’s policies or the Bank of Japan interfering. For example, the current accounts’ different policies between the dollar and Yen have caused the relative value of the USD and JPY to change.

Commodity Price Fluctuations
Commodity Price Fluctuations
That is why Forex currency pairs containing the Australian and New Zealand dollars as one of the components AUD/USD, NZD/USD, with hall of the price of commodities. The inability to determine the domestic or foreign demand and supply rates along with the trade policies in different parts of the world may lead to an up or a down movement in these pairs.