Counter Currency.

A currency pair is the main instrument with which trading occurs on the Forex exchange.

As is already clear from the name itself, it is formed from two currencies - base and quoted. Counter Currency (quoted currency) is the second currency in a currency pair, with the help of which the value of the base monetary unit is determined. Sometimes it is also called a counter currency to the main quote currency.

For example, in the EUR/JPY quote, it is the Japanese Yen (JPY) that plays the role of the quoted currency and therefore they usually say that they give 125 Yen for one Euro, and not vice versa.

In fact, the yen acts as a kind of counter that determines the value of the base currency. Most often, foreign monetary units act as the second component, and the main currency is the national one.

But this trend is observed only in domestic interbank markets. If we consider this concept in relation to Forex trading, we can highlight the following patterns:

an upward trend is observed for the currency pair .

• The quoted currency becomes more expensive – this process causes a downward trend in Forex.

It is these two patterns that should not be forgotten when forecasting the future trend of the trend, since if you focus on changes in the value of counter currency, then it always has inverse proportionality to the emerging movement on the forex chart for the currency pair as a whole.