Here is a summary I made. Interested to hear some opinions -
Euro
EUR/USD tends to move in pip by pip increments. Cable can jump in multi pip increments.
The depth of interest and liquidity in EUR/USD cause prolonged tests of levels, as limit orders at those levels are absorbed by the market.
Apart from major data releases, EUR/USD tends to exhibit it's greatest volatility during periods of session illiquidity.
Yen
USD/JPY respects technical levels with less false breaks.
The trading characteristics of USD/JPY are perhaps best understood by noting two key facts: Japan has the highest domestic savings and investment rate in the world, resulting in massive financial portfolios invested in financial instruments throughout the world; and Japanese cultural tendencies favor intra-Japanese cooperation and communication.
The practical effect of these two features is large concentrations of market interest at common levels, typically resulting in clusters of stop-loss and limit orders at key technical points. This herd-like behavior often results in large, volatile moves followed by extended periods of range-bound consolidation, as the pack responds en masse to breaks of key levels and then settles down. The pervasiveness of Japanese institutional interest in USD/JPY means the pair tends to respect technical levels far more than other currency pairs, with a lower likelihood of false breaks. This suggests traders need to respond more quickly to the breakout of key levels rather than waiting for pullbacks or a bounces to enter. There tends to be a “clustering” of market ordersaround technical levels, which favors placing stop-lossorders just beyond key technical levels (e.g., 5 to 15 pips).
The rationale here is significant limit orders will typically be in front of such levels, and the unfolding of a largemarket move will be needed to get through those limit orders first. Traders focusing on USD/JPY should pay special attention to candlestick and “Ichimoku” as they are widely followed in Asia and will frequently signal reversals or major breakouts.
Breaks of levels in the major yen pairs can often lead the way for USD/JPY.
Yen market movements can be erratic on the last day of the month and at the end of each financial semester, as the Japs tends to scale back during these times.
Cable
Cable has less respect for technical levels, which results in more false breaks.
Because of the lower liquidity and higher volatility, the pound tends to act as a leader in major U.S. dollar moves, frequently reaching or breaching coincidental technical levels before EUR/USD does. As a result, even traders who are not actively trading the pound still need to monitor its behavior and technical levels for clues about what the EUR/USD rate might do.
For instance, if negative U.S. news sends the dollar lower and the pound and Euro higher, the pound is likely to test identical resistance levels (say, recent daily highs) before the Euro, because the depth of the Euro market will slow its advance.
If the pound breaches those recent highs and follows through, it is a strong signal the Euro will also breach its recent highs and experience follow-through buying. By the same token, if the pound stalls at those recent highs, it is also a likely signal the Euro will fail in its up move.
In a highly directional market, the pound will tend to display extreme one-way behavior, rarely pulling back more than a few pips, while EUR/USD will offer greater corrective opportunities to enter. This suggests traders who are caught on the wrong side of a move need to react more aggressively and not hold out hope for a pullback, while those who are with the move can stay in longer with a trailing stop.
When it comes to technical levels in relatively calm markets, the pound frequently exhibits false breaks, as stoploss orders placed near technical levels make for tempting targets for market players. It is not uncommon for the pound to trade 15 to 20 points through a technical level, and then reverse after associated stop-buying has run its course. This suggests traders need to anticipate potential false breaks and adjust their position size and order level accordingly.
After London close, cable can often be at risk to North American position related moves.
Swissy
The Swiss franc shares many of the same characteristics as the British pound in terms of volatility and liquidity, and also tends to act as a leader in major dollar moves.
However, while pound moves often stem from UK-specific news, the Swissy tends to more closely mimic EUR/USD, but with greater volatility. This makes the Swissy ideal to watch as a leading indicator for the larger EUR/USD.
USD/CHF frequently leads the way fro the more liquid EUR/USD. A break of a level by USD/CHF can often suggest that EUR/USD will do the same.
Like the pound, the Swissy will tend to move very fast and exhibit little if any pullback in dollar-driven moves, again favoring traders who are quick on the trigger. False breaks of technical levels are also a common feature of USD/CHF in relatively calm markets; traders should adjust order levels and position sizes in a similar fashion to the pound. EUR/CHF exerts a strong pull on the Swissy and traders need to pay attention to major cross levels as well.
Liquidity in USD/CHF is never very good, but it evaporatesquickly following the European close, leading to frequent stop-loss driven moves in the North American afternoon.
