XMTrading: Is FX Cross Yen difficult? Reasons for this Differences between USD/JPY, EUR/JPY, GBP/JPY and AUD/JPY


For Japanese traders, we often hear about currencies called cross yens in addition to dollars, so we will explain the characteristics of currency pairs, their price movements and trading rates. If you are a foreign exchange trader, you have probably heard the term cross yen many times. It is said that cross yens are difficult, but is that true?

What is a cross circle?

Cross yen refers to the same exchange rate against the yen other than the US dollar, such as the euro yen, pound yen, Australian dollar yen, and Swiss franc yen. The key point here is that USD/JPY, which is the dollar/yen, is excluded. Cross yen exchange rates are calculated by multiplying the US dollar currency. The rate information on the chart is slightly different from the dollar/yen. It can move in the opposite direction, so it can be difficult to decide whether to buy or sell. Investors should use this as a reference and calculate the rise and fall of prices to determine them.

dollar straight

As an aside, dollar currency pairs that do not include the yen are called dollar straights. This includes the Eurodollar and PoundDollar. The difference with the cross-yen is that the cross-yen is a currency pair against the yen, and the dollar straight is a currency pair that is not against the yen.

About cross circle correlation

All cross yens simply involve the yen, which is why they have a large correlation in the foreign exchange market. We will explain the details of cross buying and selling using examples. Depending on how you look at the chart, there can be drastic price movements. Since it is a composite currency, the amount moves significantly, so you need to be aware of this. There are many differences in the content of the strategy. Even professionals should use tools to perform thorough technical analysis to see the direction.

strength relationship

By monitoring the cross yen, you can see the relative strength of the currency.

  • USD/JPY Uptrend
  • EUR/JPY uptrend
  • GBP/JPY Downtrend

If these conditions are met, it means that the GBP is very weak right now. The relationship USD=EUR>JPY>GBP holds true. You can see the relative strength by looking at various cross circles.

relative movement

By monitoring other currencies, the cross yen market is easy to predict.

  • EUR/USD Downtrend
  • USD/JPY Downtrend

Under these conditions, EUR/JPY will fall further. This is because the relationship of JPY>USD>EUR holds true. Cross yen is a currency pair that multiplies dollar straights. Therefore, since the minus and the minus will be multiplied, more negative force will act.

The reason why the cross circle is difficult

As mentioned above, by tracking various currency pairs, it becomes easier to read the strength and weakness of the cross yen. However, it is said that it is quite difficult until you get used to it. There are the following reasons. To participate in day trading and hold a stable position, look at the situation and enter. It is necessary to stabilize the operation while watching the movement of the base currency, and a stop loss is also necessary. Basically, beginners should at least limit the lot size themselves even in the range.

Need to see multiple currencies

The cross-yen is a currency calculated by multiplying the dollar-yen and the dollar straight other than the Japanese yen. If you want to check the strength of the euroyen, you have to look at the eurodollar and the dollaryen. The strength of the euro yen is determined by EUR/USD x USD/JPY.

Need to look at multiple economic indicators

If you want to do GBP Yen, you need to look at economic indicators for Japan, the UK, the Euro, and the US. Since it is GBP/JPY, Japan and the UK are natural, but the euro also affects the UK, and the US also affects the pound. If the euro explodes at once in EUR/GBP, the power of GBP will drop. Similarly, if the dollar rises at once in USD/JPY, the strength of the yen will decrease relatively.

Large fluctuation range

The cross yen has a very large fluctuation range compared to USD/JPY. EUR/JPY and GBP/JPY in particular are very volatile and tend to trend often. The euro and pound move much more easily than the dollar and yen, so it can be fatal if you do not have a firm grasp of price movements.

XM is recommended

XM was originally known as a forex company with too wide spreads. But this was only recently. Now there is an account type called KIWAMI account. The spread is very narrow and very suitable for trading. Therefore, this account type is highly recommended. Especially for those who trade in pounds, it is recommended because the spread is extremely narrow.



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