Since the vast majority of currency pairs in the foreign exchange market involve the US dollar, the vast majority of reports or data releases may lead to dramatic changes in the US dollar-related currency pairs. The United States has the world’s largest economy, so speculators will strongly respond to the report published by the United States, although in the long run, the report data will not show changes in the fundamental situation of the United States.

This means that even if the currency pair involved in the US dollar shows an initial trend, there may still be some dramatic fluctuations in the trend process. This makes it difficult for traders to recognize whether the exchange rate will go out of the trend, or to maintain range fluctuations.

Frequently released economic data from the United States makes it difficult for currency pairs related to the US dollar, such as the euro/dollar in the chart above, to show a steady trend.

In contrast, we see that in the same time frame, the upward trend of the euro/yen is more stable. This is probably because the exchange rate has avoided the sharp fluctuations caused by US data.

Therefore, you can see that the above two graphs show that the euro has risen in the same period, but the upward trend of the currency pair (EUR/JPY) that does not involve the US dollar is more obvious.

If you are a trend follower, then the cross currency pair is easier to grasp than the dollar straight. The trend of cross currency pairs is easier to identify, and traders will be more confident in setting entry points, because you know that these technical points of cross currency pairs are more stable than straight markets.