The USD is the currency that all others revolve around. Understanding that is a key concept to grasp early on in your trading experience. The moves in the major pairs over the last few weeks have mainly been dollar-driven. Specifically, it has been a weaker dollar on the huge stimulus measures out of the US and the virtually unlimited QE programme. All this has resulted in the present dollar weakness which has been driving the major pairs higher. So, here are a couple of practical applications to take away and apply to your trading.

Firstly, when you are trading major pairs, always look at the US dollar Index. The overall USD strength or weakness will help show you the near term expected direction in the major pairs. Here is a setup below that you can use. The Dollar Index is in the bottom right of the charts and all the majors are visible at a glance. It is helpful to lay out the major pairs alongside the Dollar Index like this:

AUDUSD

Secondly, whenever you are trading the EURUSD remember that the DXY and EURUSD always move in the opposite direction. DXY up, EURUSD down. EURUSD up, DXY down. This is why the Dollar Index is also known as the 'anti-EURUSD index'. (check out the below chart - DXY orange line, the candlestick chart is the EURUSD). So, this means that you never want to be trading the EURUSD higher if the DXY is moving higher and vice versa.

EURUSD

Grasping the USD focus of the FX world is extremely important to understand. You can use this lesson to improve your handling of the major pairs and in particular the EURUSD pair.


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Editors’ Picks

EUR/USD holds above 1.17, shrugging off upbeat US consumer confidence

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GBP/USD retreats from highs amid Brexit, coronavirus uncertainty

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USD/JPY was seen consolidating its recent gains to three-week tops, above mid-105.00s. The set-up favours bullish traders and supports prospects for further appreciating move. Only a sustained break below the 105.00 round-figure will negate the constructive outlook.

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Editors’ Picks

EUR/USD holds above 1.17, shrugging off upbeat US consumer confidence

EUR/USD is trading above 1.17, holding its gains despite upbeat US data. The CB Consumer Confidence jumped to 101.8 points, beating estimates. Fed speakers are awaited and the presidential debate is eyed.

EUR/USD News

GBP/USD retreats from highs amid Brexit, coronavirus uncertainty

GBP/USD is retreating from the highs close to 1.29 as concerns about Brexit talks and rising UK coronavirus cases are taking their toll on the pound. 

GBP/USD News

USD/JPY: Gearing up for a move towards 106.25-30 supply zone

USD/JPY was seen consolidating its recent gains to three-week tops, above mid-105.00s. The set-up favours bullish traders and supports prospects for further appreciating move. Only a sustained break below the 105.00 round-figure will negate the constructive outlook.

USD/JPY News

BTC/USD is on the verge of a massive breakout towards $10,000 or $8,000

Bitcoin has already lost a significant portion of its dominance against other altcoins. After trading sideways for such a long time, many coins are taking advantage of the situation to create massive rallies. 

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XAU/USD holds steady near multi-day tops, around $1890 region

Gold built on the previous day's goodish bounce from 100-day SMA and edged higher through the first half of the trading action on Tuesday. The overnight sustained move beyond 100-hour SMA was seen as a key trigger for bullish traders and pushed the commodity to multi-day tops.

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