In currency market, who is the market leader, EUR/USD or GBP/USD or anyother currencies?
In currency market, who is the market leader? In any market there will be few market leaders and based on their movement, others will follow. I would like to know GBP/USD, EURO/USD or any other currencies? Where can I find out tips regarding daily movement of currencies?
Hi,
I don't know whether you can call any of the currency pairs as "market leaders", as you mentioned.
There are, however, seven currency pairs that are called "the majors" and that make up over 80-85% of the total daily market volume.
These are the following:
EURUSD – which makes the biggest volume
USDJPY (US Dollar / Japanese Yen)
USDCAD (US Dollar / Canadian Dollar)
USDCHF (US Dollar / Swiss Franc)
GBPUSD (British Pound / US Dollar)
and, AUDUSD (Australian Dollar / US Dollar)
NZDUSD (New Zealand Dollar / US Dollar)
There is also the "cross currency" EURJPY, which also makes good volumes.
I have seen that some brokers offer over 60 tradable currency pair, but the above mentioned pairs (seven -eight) make up the bulk of the traded volume, so this means that the other pairs have much less liquidity and higher spreads (the difference between the bid and ask rate of your broker).
Regarding the tips regarding the daily movement of currencies, there is currently an explosion of Forex sites due to the intense marketing and hype regarding this recently newly regulated (for retail players such as us) market.
You may find useful sites such as: forexFactory.com, DailyFX.com, FXSteet.com and others.
Regarding the volatility of currency pairs, I have noted that the JPY pairs have larger movements than the rest. If I were to state the most volatile currency pair, my opinion would be
GBPJPY, EURJPY, GBPUSD.
As a measure of volatility, J. Welles Wilder introduced the concept of "Average True Range" which can be applied to any tradable instrument, although Mr. Wilder devised it initially for commodities (daily prices). It can however be applied to stocks, futures, forex, indexes, etc. Please see the links below for future references.
Regarding tips for the movement of the currency pairs, my belief is that you have to make your own approached, based on the following: trading style, technical and fundamental data used, personality and risk appetite.
Currently various brokers may offer "market briefings" about the short, medium or long term trends in the market when you open an account (demo or live).
There are so many sources that you may become overwhelmed with the amount of information therefore you should be cautious when listening to "inside information", "guaranteed signals that will make you rich", "various gurus" and others.
Now that I read one more time your question, I can say that the following pairs have a certain degree of correlation, as I personally noted from their movement throughout the last six-seven months.
USDCAD is negatively corelated with the oil price – if oil price rises, the USD will depreciate in relation with CAD.
AUDUSD is directly corelated with Gold – if gold prices rise AUDUSD will generally follow.
EURJPY, USDJPY and GBPJPY are also directly correlated and they are also correlated with the overall US stocks market (if the US stocks market is trending down, USD will depreciate in relation with the Japanese Yen).
Please see also the sites list and references quoted below.
Hoped that my answer helped you to some degree.
Bogdan.
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Hi,
I don't know whether you can call any of the currency pairs as "market leaders", as you mentioned.
There are, however, seven currency pairs that are called "the majors" and that make up over 80-85% of the total daily market volume.
These are the following:
EURUSD – which makes the biggest volume
USDJPY (US Dollar / Japanese Yen)
USDCAD (US Dollar / Canadian Dollar)
USDCHF (US Dollar / Swiss Franc)
GBPUSD (British Pound / US Dollar)
and, AUDUSD (Australian Dollar / US Dollar)
NZDUSD (New Zealand Dollar / US Dollar)
There is also the "cross currency" EURJPY, which also makes good volumes.
I have seen that some brokers offer over 60 tradable currency pair, but the above mentioned pairs (seven -eight) make up the bulk of the traded volume, so this means that the other pairs have much less liquidity and higher spreads (the difference between the bid and ask rate of your broker).
Regarding the tips regarding the daily movement of currencies, there is currently an explosion of Forex sites due to the intense marketing and hype regarding this recently newly regulated (for retail players such as us) market.
You may find useful sites such as: ForexFactory.com, DailyFX.com, FXSteet.com and others.
Regarding the volatility of currency pairs, I have noted that the JPY pairs have larger movements than the rest. If I were to state the most volatile currency pair, my opinion would be
GBPJPY, EURJPY, GBPUSD.
As a measure of volatility, J. Welles Wilder introduced the concept of "Average True Range" which can be applied to any tradable instrument, although Mr. Wilder devised it initially for commodities (daily prices). It can however be applied to stocks, futures, forex, indexes, etc. Please see the links below for future references.
Regarding tips for the movement of the currency pairs, my belief is that you have to make your own approached, based on the following: trading style, technical and fundamental data used, personality and risk appetite.
Currently various brokers may offer "market briefings" about the short, medium or long term trends in the market when you open an account (demo or live).
There are so many sources that you may become overwhelmed with the amount of information therefore you should be cautious when listening to "inside information", "guaranteed signals that will make you rich", "various gurus" and others.
Now that I read one more time your question, I can say that the following pairs have a certain degree of correlation, as I personally noted from their movement throughout the last six-seven months.
USDCAD is negatively corelated with the oil price – if oil price rises, the USD will depreciate in relation with CAD.
AUDUSD is directly corelated with Gold – if gold prices rise AUDUSD will generally follow.
EURJPY, USDJPY and GBPJPY are also directly correlated and they are also correlated with the overall US stocks market (if the US stocks market is trending down, USD will depreciate in relation with the Japanese Yen).
Please see also the sites list and references quoted below.
Hoped that my answer helped you to some degree.
Bogdan.
References :
http://www.ForexFactory.com
http://www.DailyFX.com
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:average_true_range_atr
http://www.investopedia.com/articles/forex/05/051905.asp
I think that the GBP is worth the most but the American dollar is in circulation the most taking up over 60% of world trade.
References :