I’ve been watching the various majors for a couple months now and it’s often easy to see movement that parallels across various pairs which use the USD as either base or cross currency. And I recently read an article advising against trading pairs which already closely follow each others movements, such as the GBP/USD and EUR/USD.
Can anyone attest to the validity of this opinion? If one trades G/U is it better to disregard E/U and trade other pairs that don’t feature the dollar as a cross? Which pairs are oddball and follow their own paths against the dollar, regardless of what the Euro does?
If you want to trade pairs that are un-correlated with each other then it’s valid consideration. Below is a correlation matrix DailyFX released Oct 5th. Correlations change over time as well.
