Outside of EUR/JPY, EUR cross
action tends to be concentrated in EUR/GBP and EUR/CHF, where the cross
direction is largely determined by changing outlooks between the Eurozone
economy relative to the UK and Swiss economies. Reactions to Eurozone and Swiss
news or data are most likely to be felt in the EUR crosses as opposed to
EUR/USD or USD/CHF, whereas UK news/data is going to explode all over GBP/USD
and EUR/GBP.
Sharp USD-driven moves will also
affect these crosses, with the brunt of the USD move being felt in GBP/USD and
USD/CHF, frequently biasing those legs to drive their EUR cross in the short
run. That means frequently (but not always) that a sharp move higher in the USD
will tend to see a higher EUR/CHF and EUR/GBP, while a rapid USD move lower
will tend to see lower EUR/CHF and EUR/GBP.
The pip values of these EUR
crosses will be denominated in either GBP or CHF, with GBP significantly more
expensive on a pip basis than CHF. Typical daily ranges in the EUR crosses are
relatively small on a pip basis - roughly 20 to 40 pips on average, but they’re
still substantial on a pip-value basis and roughly equivalent to daily EUR/USD
ranges.
