Currency Families


Currency Families are related Pairs of currencies with a Major Currency in common. If we look at the following pairs you can see what each of them have in common:

AUD/USD  ,  EUR/USD  ,  GBP/USD  ,  NZD/USD  ,  USD/CAD  ,  USD/CHF  ,  USD/JPY

Of course it is that USD is a part of each of the Pairs.   This relates them all into the USD Family.   In the previous discussion about Currencies we said that when a pair is going up or down in price it is difficult to determine which currency of the Pair is causing the movement.   The problem is solved by looking at the Family.

If we see the EUR/USD going up in price is it due to strength in the EUR or weakness in the USD?   If we look at the USD family and see the AUD/USD is also going up in price and the GBP/USD going up in price it will give us a good indication that the USD is losing strength across the family and all of the prices should be going down.

We can confirm this by looking at the EUR familiy.  If the prices are mixed we know that USD is causing the movment.

Notice also in the example above that USD is on the same side of the pair.   AUD/USD  ,  EUR/USD  ,  GBP/USD 

What happens if USD is on the other side of the pair?   USD/CAD  ,  USD/CHF  ,  USD/JPY 

You would expect those pairs to move in the opposite direction based upon the USD losing strength.   In our previous dicussion we learned when the first currency in the Pair is losing strength the price should go down while the other Pairs with USD on the right side are going up.

It is important to remember that within a family you may see prices increasing and decreasing and they are both telling you the same information.
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