How to Read a Forex Quote in
Forex Trading for Beginners?

A forex quote may look complicated when you first see it. It usually contains two currency names, several numbers and sometimes words such as “buy,” “sell,” “bid” or “ask.” However, a forex quote is simply a way of showing the relationship between two currencies.

For example, you may see a quote like this:

This quote compares the euro with the US dollar. It shows how many US dollars are linked to one euro at that particular time. The two figures shown on the screen are the available prices for the two sides of the market.

Learning how to read a forex quote does not require complicated calculations. It mainly involves understanding the order of the currencies, knowing what the numbers mean and recognising why two prices may appear instead of one.

All prices used in this article are for educational illustration only. They are not live market prices.

A Forex Quote is Like a Currency Sentence

The easiest way to understand a forex quote is to read it as a short sentence.

Take this example:

This can be read as:

One euro is quoted at 1.0846 US dollars.

The first currency is EUR, which stands for the euro. The second currency is USD, which stands for the US dollar.

The first currency is always the one being measured. The second currency is used to show its value. In this example, the quote is telling you how many US dollars are linked to one euro.

This same reading method can be used for every forex pair.

For example, if you see:

you can read it as:

One British pound is quoted at 1.2710 US dollars.

If you see:

you can read it as:

One US dollar is quoted at 156.20 Japanese yen.

The key is to always begin with the first currency shown in the pair.

Understanding the Two Currencies in a Quote

Every forex quote includes two currencies because one currency must always be compared with another.

For example, EUR/USD includes the euro and the US dollar. GBP/USD includes the British pound and the US dollar. USD/JPY includes the US dollar and the Japanese yen.

The currency shown first is called the base currency. The currency shown second is called the quote currency.

You do not need to memorise difficult definitions to understand this. Just remember one simple rule:

The first currency is the currency being quoted. The second currency is the currency used to show its value.

For example, in EUR/USD, the euro is shown first. This means the euro is the currency being quoted. The US dollar is shown second, so it is used to explain the euro’s value.

In USD/JPY, the US dollar is shown first. This means the US dollar is the currency being quoted. The Japanese yen is shown second, so it is used to show the value of the US dollar.

The order of the currencies is important. EUR/USD and USD/EUR are not read in the same way because the first currency has changed.

Reading a Simple EUR/USD Quote

Let’s look at a full example.

This quote is showing the euro against the US dollar.

The first price, 1.0846, is the sell-side price. The second price, 1.0849, is the buy-side price.

You can read the quote like this:

One euro is quoted at 1.0846 US dollars on the sell side and 1.0849 US dollars on the buy side.

The two numbers are very close, but they are not the same. This is normal in financial-market quotations.

The difference between the two prices is called the spread.

In this example, the difference is:

1.0849 minus 1.0846 equals 0.0003.

For a pair such as EUR/USD, this is commonly described as a three-pip spread.

You do not need to focus too much on the calculation at first. The most important thing is to recognise that the platform is showing two different prices, one for each side of the quote.

Why Forex Platforms Show Two Prices?

A forex platform commonly shows two prices because buying and selling are shown separately.

The sell-side price is commonly called the bid price. The buy-side price is commonly called the ask price.

Some platforms may use the words “sell” and “buy.” Other platforms may use the words “bid” and “ask.” The wording may differ, but the idea is the same.

For example, a platform may show:

Another platform may show:

Both displays are showing the same type of quote structure.

The bid or sell-side price relates to the available price for selling the first currency in the pair. The ask or buy-side price relates to the available price for buying the first currency in the pair.

When looking at a platform, always check the labels carefully. Different platforms may display the information in different layouts.

Reading a GBP/USD Quote

Now let’s use another example.

This quote compares the British pound with the US dollar.

You can read it as:

One British pound is quoted at 1.2710 US dollars on the sell side and 1.2714 US dollars on the buy side.

The first currency, GBP, is the British pound. The second currency, USD, is the US dollar.

The price difference is:

1.2714 minus 1.2710 equals 0.0004.

For this example, the spread is commonly described as four pips.

The quote looks different from EUR/USD because the numbers are different, but the reading method is exactly the same.

First, identify the first currency. Second, identify the second currency. Then read the two available prices.

Reading a USD/JPY Quote

Now consider a quote involving the Japanese yen.

This quote means:

One US dollar is quoted at 156.20 Japanese yen on the sell side and 156.24 Japanese yen on the buy side.

USD is the first currency, so the US dollar is being quoted. JPY is the second currency, so the Japanese yen is being used to show the value.

USD/JPY looks different from EUR/USD and GBP/USD because it is usually shown with fewer decimal places. This is normal for many currency pairs involving the Japanese yen.

The difference between 156.20 and 156.24 is 0.04. For this example, that difference is commonly described as four pips.

The important point is that the quote is still read in the same way. One US dollar is being compared with Japanese yen.

Reading a Pair Without the US Dollar

Not every forex pair includes the US dollar.

For example, you may see:

This quote compares the euro with the British pound.

You can read it as:

One euro is quoted at 0.8521 British pounds on the sell side and 0.8524 British pounds on the buy side.

The first currency is EUR, so the euro is being quoted. The second currency is GBP, so the British pound is being used to show the euro’s value.

The reading process does not change just because the US dollar is not included.

You still begin by reading the first currency. Then you look at the second currency. After that, you read the two available prices.

Understanding Why the Numbers Move?

Forex quotes can change while the market is open.

For example, imagine you first see this EUR/USD quote:

Later, you may see:

The later quote shows that one euro is now being quoted at a higher number of US dollars than before.

If the numbers move lower, it means one euro is being quoted at a lower number of US dollars than before.

For example, if the quote changes to:

then the euro is being quoted at a lower number of US dollars compared with the earlier example.

The important part is to compare the same side of the quote. Compare sell price with sell price, or compare buy price with buy price. This makes the quote easier to follow.

Reading Quotes on Different Platforms

Forex quotes can look different depending on the platform.

One platform may show:

Another platform may show:

Another platform may show:

Although the format may change, the quote still contains the same main information. It shows two currencies and two available prices.

Some platforms may make the final digits larger or easier to see. Others may show the complete price in one line. Before using any platform, take a moment to check how it labels buy prices, sell prices, bid prices and ask prices.

A Simple Way to Remember Forex Quotes

You can use this simple routine whenever you see a forex quote.

This method works for EUR/USD, GBP/USD, USD/JPY, EUR/GBP and many other currency pairs.