The correlation of majors and cross pairs
Today is a bit special because almost all majors are in-line with their trends
The downmove of AUDUSD and NZDUSD started during the Asian session and they are currently facing some support
levels right ahead.
So for these pairs we definitely come late to the party but our US and Asian traders had great opportunities to catch
these moves early.
But the USDJPY weakens a bit which offers us a good counterpart for our trades!
*****
Remember, the majors are always the driving force behind a move on the
cross pairs
so if EURUSD goes down and USDCAD goes up this equalizes itself on EURCAD
and results in a
sideways move as you can see below
*****
So let's check what's going on at USDJPY
It's moving sideways with a low delta but the JPY strengthens while the USD weakens a bit.
This weakness of the USDJPY can be used in our favor because AUDUSD down + USDJPY down = AUDJPY down
So let's check the chart situation on AUDJPY
This downmove has been initially forced by the AUDUSD and there is a good chance that USDJPY will push it further.
The last resistance has been broken and so we took the chance of a short trade on AUDJPY.
And this is how this looks in the complete AUDJPY chart. There's lots of space to the downside.
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