A pip (percentage in point) is the smallest standardized price movement a forex pair can make. For most pairs it's the fourth decimal place (0.0001); for pairs quoted with two decimals, like those involving the Japanese yen, it's the second decimal place (0.01). Pips are the common unit traders use to measure price movement, gains, and losses regardless of which currency pair they're trading.
Example
EUR/USD moving from 1.1050 to 1.1051 is a one-pip move.