And like the U.S. dollar, the euro and yen are also held as reserve currencies by different countries.

So this makes the euro and yen crosses the most liquid outside of the U.S. dollar-based “majors.”

Trading the Euro Crosses

The most popular EUR crosses are EUR/JPY, EUR/GBP, and EUR/CHF.

News that affects the euro or Swiss franc will be felt more in EUR crosses than EUR/USD or USD/CHF.

U.K. news will greatly affect EUR/GBP.

Oddly enough, U.S. news plays a part in the movement of the EUR crosses. U.S. news makes strong moves in GBP/USD and USD/CHF.

This not only affects the price of the GBP and CHF against the USD, but it could also affect the GBP and CHF against the EUR.

A big move higher in the USD will tend to see a higher EUR/CHF and EUR/GBP and the same goes for the opposite direction.

Confused? Ok ok…let’s break this down.

Let’s say that the U.S. shows positive economic data causing the USD to rise.

This means that GBP/USD would fall, driving the price of the GBP down.

At the same time, USD/CHF would rise, also driving the price of the CHF down.

The drop in GBP price would then cause EUR/GBP to rise (since traders are selling off their GBP).

The drop in CHF price would also cause EUR/CHF to rise (since traders are selling off their CHF).

Conversely, this would also work in the opposite direction if the U.S. showed negative economic data.