Currency Pair Quoting Order
FundamentalsThe quoting convention that decides which currency is written first in a pair, why EUR/USD is quoted instead of USD/EUR, and why it matters.
Currency pair quoting order, also called the quotation convention, decides which currency is written first in a pair and therefore which one you buy or sell when you open a position. The market follows an informal seniority ranking: EUR comes first, then GBP, AUD, NZD, USD, CAD, CHF and finally JPY. That is why prices are quoted as EUR/USD rather than USD/EUR, and USD/JPY rather than JPY/USD.
The first currency is the base, the second is the quote, and the price shows how many units of the quote currency one unit of the base is worth. The order matters because it fixes the direction of a trade and the way pip value is calculated.