The vast majority of retail forex content, education, and discussion focuses on a handful of major currency pairs - EURUSD, GBPUSD, USDJPY, USDCHF. These pairs are liquid, widely covered, and easy to access on any broker. They are also among the most heavily analysed instruments in the financial markets, with thousands of institutional participants, algorithmic systems, and retail traders all looking at the same levels, reading the same news, and reacting to the same data. The competition for edge in major pairs is ferocious.
Cross pairs - those that do not include the US dollar - represent a genuine pocket of relative inefficiency in retail trading. Not because they are secret or unknown, but because they receive less coverage, fewer traders specialise in them, and the dynamics driving them are often more tractable than the sprawling macroeconomic narratives that govern USD pairs.
What Makes a Cross Pair Different
A cross pair is simply any pair that does not include the US dollar as either the base or quote currency. EURGBP, AUDJPY, EURJPY, AUDCAD, AUDNZD, NZDCAD, EURCHF, and GBPJPY are all cross pairs. They are priced by the market as the implied rate between their two component currencies via the USD - for example, AUDCAD is essentially AUDUSD divided by CADUSD, computed continuously by the interbank market.
This synthetic pricing means cross rates often behave with more internal consistency than major pairs. When both the AUD and CAD are commodity-linked currencies from similar economic structures, the AUDCAD rate reflects the relative economic performance, central bank divergence, and risk appetite between those two specific economies - isolated somewhat from the broad dollar narrative that dominates major pair analysis.
The Case for Oceanic Crosses
AUDCAD, AUDNZD, and NZDCAD occupy a particularly interesting niche. All three are commodity currency pairs from similar macro environments - Pacific Basin export economies with central banks that share certain policy tendencies. Their relative movements are driven by:
- Divergence between the RBA, RBNZ, and Bank of Canada interest rate cycles
- Relative commodity price movements - particularly iron ore and LNG for AUD, dairy for NZD, and oil for CAD
- Risk-on/risk-off dynamics that affect commodity currencies collectively
- Asian demand signals, since Australia and New Zealand are heavily exposed to Chinese economic cycles
Because these pairs respond to specific, identifiable drivers rather than the broad and noisy USD narrative, they tend to exhibit more sustained range behaviour over medium timeframes. This makes them particularly well-suited to systematic approaches that exploit mean-reversion tendencies - which is why Black Tie focuses exclusively on AUDCAD, AUDNZD, and NZDCAD on M15. The pair selection is not arbitrary; it is based on the statistical behaviour of these crosses in the Oceanic session where activity is sufficient but not turbulent.
JPY Crosses - Volatility and Carry
The Japanese yen crosses - EURJPY, GBPJPY, AUDJPY - have a completely different character. The yen's historically low interest rate makes it the most widely used funding currency in carry trades: traders borrow in JPY and invest in higher-yielding currencies. This creates a systematic tendency for JPY to weaken when risk appetite is strong (carry trade on) and strengthen sharply when risk appetite deteriorates (carry trade unwind).
GBPJPY in particular is notorious for its volatility - daily ranges of 100-200 pips are not uncommon, and during risk-off events the pair can move 400-500 pips in hours. For experienced traders comfortable with that volatility profile, the pair offers exceptional opportunity. For beginners, it is one of the more dangerous instruments in retail forex. The pip value is high and the price action can gap through stop levels during fast markets.
EUR Crosses and Eurozone Divergence
EURGBP tracks the relative performance of the eurozone and UK economies and is heavily influenced by Brexit-related political developments, relative inflation trajectories, and ECB-versus-BoE policy divergence. It tends to be a slower, steadier pair with more predictable technical respect for key levels compared to the JPY crosses.
EURCHF is one of the most technically interesting pairs due to the Swiss National Bank's history of active intervention. The SNB has famously defended specific levels - most spectacularly with the EUR/CHF floor at 1.20 that was abandoned in January 2015, causing one of the most violent single-day moves in forex history. Any analysis of EURCHF must account for SNB intervention risk as a permanent background factor.
Practical Considerations for Trading Crosses
The primary practical disadvantage of cross pairs versus majors is wider spreads. EURUSD typically trades at 0.5-1.0 pip spread on a quality ECN broker. AUDNZD might trade at 1.5-2.5 pips, and GBPJPY at 1.5-3.0 pips. These wider spreads reduce the profitability of short-target strategies and increase the break-even hurdle.
Liquidity also thins out more sharply during off-hours on cross pairs. The spreads on a cross pair at 3:00 AM GMT can be 3-4x wider than during the London session. For EAs designed to trade crosses, restricting activity to appropriate session windows is more important than it is for major pairs.
That said, the opportunity in cross pairs for traders willing to develop genuine expertise in their specific drivers is real. Less competition from retail traders, more tractable fundamental narratives, and in several cases better statistical behaviour for systematic strategies make a compelling case for looking beyond the majors. The edge in EURUSD has been competed away to a far greater degree than the edge in a well-understood niche cross pair. That asymmetry is worth pursuing.