Direct and Indirect Quotes on Forex: What's the Difference and How to Understand Them

Direct and Indirect Quotes on Forex: What's the Difference and How to Understand Them

In the world of currency trading, everything starts with quotes.
They show how much one currency costs in relation to another. But not all traders understand at first glance the difference between a direct quote and an indirect one and why this nuance plays a role in trading.
Having understood this, you will be able to competently analyze the market and build strategies without unnecessary confusion.

What is a direct quote?

Direct quotation shows how many units of national currency must be paid for one unit of foreign currency.

For example, for a US resident, a direct quote of the EUR/USD pair = 1.1000 means: for 1 euro you need to pay 1.10 dollars. The dollar is the national currency, the euro is a foreign currency.

Feature: when the quotation increases, the foreign currency becomes more expensive, and the national currency becomes cheaper.

Direct and Indirect Quotes on Forex: What's the Difference and How to Understand Them

What is an indirect quote?

An indirect quotation, on the contrary, shows how many units of foreign currency can be obtained for one unit of national currency.

For the US, an example of an indirect quote is: USD/JPY = 145.00 . This means that for 1 dollar you can get 145 Japanese yen. Here, the dollar is the national currency, and the yen is a foreign currency.

Feature: when the quotation rises, the national currency becomes stronger, and the foreign currency becomes cheaper.

Why is this important for a trader?

At first glance, the difference seems to be just a formality. But in practice, understanding quotes affects:

trend analysis - in direct quotation growth = weakening of the national currency, in indirect quotation - its strengthening;

profit and loss calculation - especially for cross rates where there is no dollar;

the work of advisors and indicators - many algorithms take into account the type of quote for the correct signals.

Practical example

Let's imagine a trader from Europe opens a deal in the GBP/USD pair . For him, this is a direct quote: the higher the price, the more expensive the pound is against the dollar.

Now let's look at the USD/CHF pair . For an American, this is an indirect quote: the higher the value, the stronger the dollar and the weaker the Swiss franc. At first glance, this is a trifle, but it is precisely these nuances that determine the direction of transactions.

Cross-courses and additional complexity

A separate topic is currency pairs without the dollar, for example EUR/GBP or AUD/JPY . Here, quotes can be both direct and indirect, depending on which currency is national for the trader. This complicates calculations, but gives more flexibility in trading.
Direct and indirect quotes are not just a theoretical difference, but a working tool that helps to understand the market dynamics and correctly calculate trading results.

The better a trader understands the nuances of quotes, the easier it is for him to analyze price movements and build a strategy.


Written by Ethan Blake
Independent researcher, fintech consultant, and market analyst.
September 11, 2025

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