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[Oluti]

Let’s pretend the Fed announces they will raise interest rates. The market quickly starts buying the U.S. dollar across all major currencies….EUR/USD and GBP/USD fall while USD/CHF and USD/JPY rise.

You were short EUR/USD and were pleased to see price move in your favor making you some pips, but right before you were about to break out the cigar, you notice your friend who was long USD/JPY made a lot more pips than you.

You’re like “What’s up with that yo?”

You compare the charts of EUR/USD and USD/JPY and see that USD/JPY made the bigger move. It broke through a major technical resistance level and shot up 200 pips while EUR/USD barely shot down 100 pips and failed to break a major support level.

You’re thinking to yourself, “If the U.S. dollar was being bought across the board, then how come my EUR/USD trade looks so weak compared to my friend’s USD/JPY trade?”

This is due to the currency crosses! In this particular example, EUR/JPY.

When USD/JPY broke through its major resistance level, the combination of stop losses being hit and breakout traders jumping on the bandwagon pushed it even higher.

Since buying more USD/JPY weakens the yen, this would cause EUR/JPY (and possibly other yen-based pairs) to break through its major resistance level, once again hitting stops and attracting breakout traders, pushing EUR/JPY even higher

This causes the euro to strengthen and slows down the descent of your EUR/USD trade. The EUR/JPY cross buying acts a “parachute” and this is why EUR/USD didn’t move as much or as fast as the USD/JPY.

So even if you only trade the major currencies, cross currency pairs still have an effect on your trades!

 

[lioralace]

Why Currency Crosses Matter—Even If You’re That “Majors-Only” Trader

So you did everything textbook. Fed hiked rates, dollar flexed its muscles, and you hopped onto a juicy EUR/USD short like a pro. Price dipped your way… nice! Time to pop champagne, right? Hold up. Your buddy over there? He just went long USD/JPY and pretty much doubled your pips. Ouch.

You’re staring at the chart, low-key confused. Same dollar pump, same news—how’d his trade blow up while yours barely crawled?

Welcome to the weird world of currency crosses. Yeah, those oddball pairs you usually ignore—like EUR/JPY—can totally mess with your trades even if you (think you) only play the majors.

Here’s the twist most rookies miss: cross pairs aren’t just a sideshow. They’re busy backstage, yanking on the levers and flipping switches while you’re laser-focused on EUR/USD or GBP/USD. Sometimes they turbocharge your moves, sometimes they slam the brakes for absolutely no reason you can see... unless you're peeking behind the curtain.

Back to our example. USD/JPY rips higher, shattering resistance like it’s made of balsa wood. Stop-losses pop, breakout chasers pile in, and suddenly everything JPY-related is going orbital. This steamrolls the yen across ALL its pairs—including our old friend EUR/JPY.

Now, here’s where it bites you: while you’re betting on EUR/USD to drop (euro nice and weak), the euro over in EUR/JPY is actually looking weirdly strong—because USD/JPY’s rally is dragging it up by the collar. That euro strength starts acting like a parachute, slowing down your sweet EUR/USD short. So while your friend’s USD/JPY goes full rocket ship, you’re just… well, coasting.

It’s kinda like trying to push a shopping cart downhill while somebody’s sneaky nephew is riding the brakes. It’ll roll, but not with the oomph you had in mind.

Lesson time: forex isn’t just about smashing buy or sell on one pair—it’s all a tangled web of connections. That “side pair” you never check? It might be the reason your trade stalls—or explodes.

So, next time, before you hit that button, skim the crosses. Trading EUR/USD? Give EUR/JPY and EUR/GBP a quick squint. GBP/USD? Don’t forget GBP/JPY or GBP/CHF. These pairs are like a cheat code for digging out hidden currency strength or weakness.

Bottom line: In FX, it’s not just picking the right direction. It’s picking the exact right pair to ride that move. Sometimes, the loudest action is happening where you’re not even looking.

So, when the news hits and the dollar’s on a rip, don’t get tunnel vision. Zoom out. Check the crosses. Because if you don’t pay attention, you might be leaving serious cash on the table.

And hey, wouldn’t it be nice to be the one bragging about double the pips for once?