A currency pair or else an exchange rate is a quotation of two different currencies (i.e. EURUSD). The first listed currency of a currency pair (i.e. EUR) is called the base currency, and the second currency is called the quote currency (i.e. USD).

■ There are 8 major currencies: United States Dollar (USD), Euro (EUR), Japanese Yen (JPY), United Kingdom Pound (GBP), Switzerland Franc (CHF), Canadian Dollar (CAD), Australian Dollar (AUD), and New Zealand Dollar (NZD)

■ The are also 7 major currency pairs that are called the 'Majors' and include the US Dollar against EUR, JPY, GBP, CHF, CAD, AUD, and NZD.

These are some of the most tradable Forex currency pairs.

Currency Trading Tools

There are many free Forex trading tools designed to improve the performance of currency traders. These are some useful online Forex tools.

■ FOREX MARKET SENTIMENT

The market sentiment tool shows how many traders have taken a particular position in a currency pair. The market sentiment highlights the crowd behavior.

► Dukascopy SWFX Sentiment

■ COMMITMENTS OF TRADERS REPORT

The Commitments of Traders (CFTC) is a weekly report presenting the net non-commercial (speculative) positioning in the US Forex futures market. The report can highlight the change in the positions of the 'smart money'. The COT report is released every Friday at 3:30 pm (EST time) and shows the positions for the prior Tuesday.

► More about Commitments of Traders on TradingCenter

► CME Group COT | ► Scotia Bank Report