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Pair least affected by majors?

  • #1
  • First Post: Jul 5, 2010 2:05pm Jul 5, 2010 2:05pm
Which cross currency pair, or other pair, is the least affected by moves on the majors? I like the chf/jpy, but I noticed that it is strongly affected by the eur/usd and the usd/chf.

I want the best pair for range trading that is not dependent on the majors and is least affected by the majors.

What pair or pairs would that be?

Urgent: opinions needed!
  • #2
  • Jul 5, 2010 2:56pm Jul 5, 2010 2:56pm
None. At least none on a consistent and predictable basis. Reason is

eur/jpy / usd/jpy = eur/usd

eur/chf / usd/chf = eur/usd

eur/jpy / eur/chf = chf/jpy

and so on and so on....

You can trace any pair back to majors so any movement of a major pair will always and has to create movement in other pairs. It's like a big spider web. Now which pairs move to compensate is always changing. It will depend on what currency is the driving force of the move. Take e/u, e/j, and u/j for example. If a bout of risk aversion happens the yen will probably be bought as a safe haven and between those three pairs e/j and u/j will probably absorb most of the move an e/u will range. Or not. You'll never know. The next day the euro could be the driving force cause of some news and e/j and e/u make big moves and u/j just ranges or all three could make big moves. It's all a shot in the dark. At least now it is. EUR/CHF used to be nice to range trade. It would stay in a couple hundred pip range for months at a time, but no longer. Anyway, that's it. Happy trading.
  • #3
  • Jul 5, 2010 3:11pm Jul 5, 2010 3:11pm
Thanks for the input.

I know that eur/gbp used to trade within about an 80 pip range, but not anymore. Here's an eye-opening article/chart: http://www.kathylien.com/site/day-tr...trading-ranges

On another forum, someone wrote that the aud/nzd almost always retraces within a 150-pip range. Is that true? If so, would this be the best pair to range trade?




Quoting Lonestar
None. At least none on a consistent and predictable basis. Reason is

eur/jpy / usd/jpy = eur/usd

eur/chf / usd/chf = eur/usd

eur/jpy / eur/chf = chf/jpy

and so on and so on....

You can trace any pair back to majors so any movement of a major pair will always and has to create movement in other pairs. It's like a big spider web. Now which pairs move to compensate is always changing. It will depend on what currency is the driving force of the move. Take e/u,...
  • #4
  • Jul 5, 2010 3:45pm Jul 5, 2010 3:45pm
Apples and oranges. You're referring to a pair's average daily range which has nothing to do with if it's appropriate to range trade or not. It could have an 80 pip daily range but be trending overall with very few retracements and move 500 pips in 5 days. Would you want to range trade that or follow the trend? Obviously follow the trend cause it's trending regardless of it's daily ATR. A small daily range doesn't mean that pair is ranging vs trending. If your looking to range trade a pair you need to also factor in time. Look at AUD/CAD from feb to may this year on the daily. It stayed in about a 250 pip range on a slighty descending channel. Great to range trade. But then in may it dropped almost a 1000 pips. You can find ranges on almost any pair on different time frames. Just realize it's going to break out sooner or later. There is no simple answer to what you're looking for. Depending on what time frame you're looking at, a pair could be considering ranging and the channel it's ranging in is 1000 pips over months or 100 pips over days on a smaller time frame.
  • #5
  • Jul 5, 2010 3:59pm Jul 5, 2010 3:59pm
Yes, I realize what you're saying is true. I've certainly seen examples of it - the aud/cad being a prime one, as you pointed out.

So, what about what I wrote about the aud/nzd? Is that true for that pair? If so, wouldn't this be the most consistent pair to range trade? If not, which would you say is the most consistent, overall -- keeping in mind, of course, that most any pair can do what the aud/cad did.



Quoting Lonestar
Apples and oranges. You're referring to a pair's average daily range which has nothing to do with if it's appropriate to range trade or not. It could have an 80 pip daily range but be trending overall with very few retracements and move 500 pips in 5 days. Would you want to range trade that or follow the trend? Obviously follow the trend cause it's trending regardless of it's daily ATR. A small daily range doesn't mean that pair is ranging vs trending. If your looking to range trade a pair you need to also factor in time. Look at AUD/CAD from feb...
  • #6
  • Jul 5, 2010 4:20pm Jul 5, 2010 4:20pm
AUD/NZD doesn't look any better than a bunch of other pairs. It's been in a loose range for the past month or so on the daily but also just created a double bottom late last week with the low in mid May. My best advice, FWIW, is to just look at a bunch of charts on the time frame you prefer to trade and you'll find some pairs with decent ranges to trade. Like I said, I can't recommend a specific pair right now cause this are constantly changing and I try to stay away from pairs that are ranging. Good luck to you.
  • #7
  • Jul 5, 2010 4:31pm Jul 5, 2010 4:31pm
Thanks for your posts.

On a different note, what do you think the usd/chf pair will do? Continue to tank or go back up?

Quoting Lonestar
AUD/NZD doesn't look any better than a bunch of other pairs. It's been in a loose range for the past month or so on the daily but also just created a double bottom late last week with the low in mid May. My best advice, FWIW, is to just look at a bunch of charts on the time frame you prefer to trade and you'll find some pairs with decent ranges to trade. Like I said, I can't recommend a specific pair right now cause this are constantly changing and I try to stay away from pairs that are ranging. Good luck to you.
  • #8
  • Jul 5, 2010 5:03pm Jul 5, 2010 5:03pm
Quoting sevenjones
Thanks for your posts.

On a different note, what do you think the usd/chf pair will do? Continue to tank or go back up?
Probably one or the other. Ha! I am seeing some inside bars on the daily and wedge on 4h. I wouldn't take a trade on that right now. I would wait to see what happens the next couple days. It's also stalling at the 200 day SMA. If it breaks lower next areas to look at would be 1.0500 and 1.0433 although if it breaks higher to around 1.0720 and held I would probably take a small long position just for shit's and giggles. It's anyone's guess right now.
  • #9
  • Jul 5, 2010 6:08pm Jul 5, 2010 6:08pm
AUD/NZD is usually the best pair but with the economic slowdown right now there is no such thing. Because business is slowing down again pairs tend to get into these long drawn out trends that dont move much but just drift in one direction. Then suddenly some news story comes along and wham the market makes a major move that affects everything. The 30% downturn in USA real estate last week is an example. Because business seems to be slowing down again the market becomes a news centered market. This makes it extremely unpredictable so it becomes a very difficult market to range trade.
  • #10
  • Last Post: Jul 24, 2010 8:46pm Jul 24, 2010 8:46pm
Your answer is none.

All currencies are somewhat interlinked.
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