Why do we look at FX charts as PAIRS?

It dawned on me the other day, why do we look at FX charts as PAIRS?

Wouldn't it make more sense to look at FX charts as we do any other trading instrument such as stocks, oil, gold etc.

For example, if you think about the situation that would have to take place for the EUR/USD to be rising as part of an uptrend you would need 1 of 3 scenarios happening:

1) EUR strengthening while USD weakening
2) EUR strengthening while USD neutral
3) EUR neutral while USD weakening

Now if you think about it, scenario 1 is going to cause the most upward movement in EUR/USD because there will be more upward momentum pushing it that way as opposed to the other 2 scenarios. Knowing exactly what is driving price at any given moment on a PAIR is undoubtedly going to help determine how strong the move is and more accurately what we can expect in advance from carrying out proper analysis on what is actually doing the moving, rather than what is merely reflecting the movements..

So, I am left wondering, wouldn't it be better to carry out analysis on individual charts rather than pair charts in FX since we could determine which scenario we are in that is driving price and therefore more accurately understand whats going on, not to mention be able to put currencies that are rising and weakening at the same time against each other for strong moves..

Why is this? Thanks.

If you do a little search on FF, you will find that using the currencies strength in pairs trading is a very common style of trading. And many tools have been coded for this.

Everything is priced against something else. Oil vs USdollar, Gold vs US Dollar, Stocks vs US Dollar etc. So not sure what your point is.

What you probably mean is the underlying value of the currency, well that is the Dollar Index, Euro Index etc.
where that currency is valued against a combined weighted average of all the other major currencies.
This can be a more balanced view of the currency's strength rather than comparing an individual currency.

This is correct. We can look at FX market with currency strenght and similar principles. No need to get comfy with particular pair only.

We can say that FX world is pretty much vely vely different from equities and commodity markets. Why?

One really cant compare trading L/S Google or trading L/S USDCAD?

Google index:
Nasdaq?
Similar Tech stocks?
World index of stocks?
Whats gonna be the weight on one of them, etc etc?

whereas
USD
CAD

are different mathematical worlds by itself...


I personally would say that we have a strong relationship between all currencies. Its a mathematical world in a way. And we must love math in this place.

If we have a strong flow of JPY strenght we could and will see it on all XXXJPY pairs. It is very likely thing to see and sometimes also to predict. Especially daily moves of interest.