The **best three hedged Forex pairs**

The best three hedged Forex pairs typically involve combinations that are:

1. Highly correlated (positively or negatively)
2. Liquid (low spreads, fast execution)
3. Involve major currencies (stable and predictable)

Here are three of the best hedged Forex pairs:

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1. EUR/USD vs. USD/CHF (Negative Correlation Hedge)

• Why it works: These pairs are strongly negatively correlated, often moving in opposite directions because both are heavily influenced by the USD and share inverse safe-haven flows.

• How to hedge:

  • If you buy EUR/USD, hedge by selling USD/CHF.
  • If EUR/USD goes up, USD/CHF often goes down and vice versa.

• Advantage: High liquidity, strong historical inverse movement.

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2. GBP/USD vs. EUR/USD (Positive Correlation Hedge)

• Why it works: These are positively correlated due to shared economic zones (Europe & UK) and both involving the USD as a counter currency.

• How to hedge:

  • Long one, short the other (e.g., long GBP/USD, short EUR/USD).
  • Profit from divergence or relative strength differences.

• Advantage: Both pairs are highly liquid and react to similar news, but not identically.

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3. AUD/USD vs. NZD/USD (Regional Positive Correlation Hedge)

• Why it works: These pairs often move together due to similar export economies, commodity exposure, and proximity (Australia and New Zealand).

• How to hedge:

  • Use when expecting volatility in one while the other remains stable.
  • Long AUD/USD, short NZD/USD or vice versa.

• Advantage: Smaller divergences allow for short-term hedge or arbitrage strategies.

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✅ Bonus Tip:

Use correlation matrices (available on many trading platforms) to check the current correlation strength between pairs before executing a hedge. Correlations change over time.