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Chapter 22, Part III. Crosses – Continuation of Continuation... and Finish. Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 22, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Crosses as majors analysis tool


    Commander in Pips: So we’ve spoken many times that it is better to focus on major pairs first, or even to stick with just single pair and not spread attention much between all pairs. Still, even if you do not plan to trade crosses, you may use them. Sometimes crosses could shed light on where some major pair could go.

    As you know, many major pairs move in same direction, but with different degree. For instance EUR/USD and GBP/USD – correlation between them is solid and very often they react on some news (especially from US) in the same direction. Let’s assume that you want to enter Long, but could decide what pair to choose, since both of them move higher.

    In this case EUR/GBP is your clue. If EUR/GBP moves higher or your analysis tells that it should go higher, then EUR is looks stronger than GBP, and, hence EUR/USD will show greater appreciation, compared to GBP/USD. The same is true for down move and for other currencies.

    Still, as we said – this is mostly applicable to USD-contained pairs and all will narrow down to your view on the USD – how strong or weak it is. So, if you have a bearish view on USD – you may act in any major pair – EUR, GBP, AUD, NZD, CHF and JPY, but which one to choose to make a parlay on USD weaken – crosses could help us. For example, if you think between USD/JPY and USD/CHF – look and CHF/JPY and so on.


    Crosses on majors impact

    Pipruit: Well, this is really interesting, Sir. But could crosses somehow have influence on majors?​

    Commander in Pips: Yes, this is possible, but mostly due to technical reasons and speculations. It’s better to explain by example. Let’s assume that Fed announces an unexpected rate hike, and the dollar is starting to skyrocket – everybody start to buy USD
     
    #1 Sive Morten, Dec 22, 2013
    Lasted edited by : Sep 30, 2016
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