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Key Takeaways
- Definition: A "Cross Pair" is any currency pair that does not include the US Dollar (e.g., EUR/JPY, GBP/AUD, CAD/CHF).
- Trends: Crosses often trend cleaner than majors because they are isolated from US News manipulation (NFP, Fed Speeches).
- Volatility: Pairs like GBP/JPY and EUR/NZD are extremely volatile, offering huge pip ranges for day traders.
- Pip Value: Calculated differently! 1 lot on GBP/JPY pays differently than 1 lot on EUR/USD. Always check your risk calculator.
- Spreads: Usually higher than majors (2-5 pips). Not suitable for extreme scalping unless you have a Zero Spread account.
Table of Contents
The World Beyond USD
The US Dollar is involved in 80% of transactions. But sometimes, the USD is "messy" (choppy sideways movement waiting for news).
That is when Cross Pairs shine. If the US is dead, but Japan keeps printing money, the Euro vs Yen (EUR/JPY) chart will look like a rocket ship.
Majors vs Minors (Crosses)
| Feature | Majors (e.g. EUR/USD) | Crosses (e.g. GBP/JPY) |
|---|---|---|
| Liquidity | Extreme | High to Medium |
| Spread | Low (0.1 - 1.0 pip) | Medium (1.5 - 4.0 pips) |
| Daily Range | 80 pips | 150+ pips |
| News Impact | Affected by everything | Specific to the 2 countries |
Most Popular Crosses
1. EUR/JPY & GBP/JPY (The Yen Crosses)
These are the favorites of momentum traders. They track "Risk Sentiment." When stock markets go up, Yen crosses usually fly up.
2. EUR/GBP (The Chunnel)
Very slow. Low volatility. Because Europe and UK economies are similar, this pair often ranges. Great for Range Trading beginners.
3. AUD/NZD (The Neighbors)
Australia and New Zealand are highly correlated. This pair often gets stuck in massive multi-year ranges. Parity (1.0000) is a huge magnet.
Trading Strategy for Crosses
Trend Following on H4.
Because crosses rely on the economic divergence between two specific countries (e.g., UK raising rates vs Japan keeping rates low), trends tend to allow for fewer deep pullbacks.
Using Moving Averages (EMA 20/50) crossovers works better on crosses than on the choppy EUR/USD.
Calculating Pips & Profit
Warning:
On EUR/USD, 1 Lot = $10/pip.
On EUR/GBP, 1 Lot = ~$13/pip (because the quote currency is Pounds).
On EUR/AUD, 1 Lot = ~$6.50/pip (because the quote currency is Aussie Dollars).
Adjust your lot size accordingly! If you trade your normal size on EUR/GBP, you are risking 30% more than usual.
Frequently Asked Questions
Why are spreads wider?
Brokers often have to perform two transactions to create a cross (buy EUR/USD then sell USD/JPY to make EUR/JPY). This cost is passed to you.
Are Exotic pairs considered Crosses?
Technically yes, but "Exotics" usually involve a developing nation's currency (USD/TRY, EUR/ZAR). "Minors" or "Crosses" usually refer to major currencies crossed avoiding USD.
What is the best time to trade crosses?
Depends on the pair. Trade EUR/GBP during London. Trade AUD/JPY during the Asian/Tokyo overlap. Trade pairs when their specific markets are awake.
