Form a square with your currency pairs in which the DKK is the centre point. You never know what you might learn by looking at four currency pairs when the quote currency is the same versus the four different base currencies. Sometimes the most unlikely pair has the best FX rates. Below is a comparison of only two of these pairs: GBP/DKK and AUD/DKK. The comparison will give you a start to understanding both pairs and their current movements, as well as why you should compare. You might find the AUD/DKK is better for long term versus a short term trade with the GBP/DKK. Remember, what happens in the moment is just a small piece of the pie and you always have to assess current data.
Moments in Time: FX Rates of GBP/DKK
The first thing you might notice if you choose to look at three months in mid 2013 is the GBP/DKK has a near sideways movement. It does not mean the FX rates have been unmoving as is the case with some currency pairs. It just means that there is a very hard to define trend in favour of the DKK. At first in May 2013 the pair was around 8.85 to 8.75. There was a fall to 8.70, which rode on a consolidation pattern until mid June with an increase to near 8.80. The range trade became 8.80 to 8.70 throughout the month of June. Finally in July 2013 a new drop occurred, going down to 8.60 approximately.
From all appearances August will have some consolidation in a range of 8.60 to 8.70. With FX rates you cannot predict the future. You can see what trends have occurred and watch the news. If the GBP has better news than it has in the last three months it could force the GBP/DKK to break out in a run for GBP gain. On the other hand, if the news is worse the DKK could have a run to a new low. These are the things you have to look at charts and consider.
AUD/DKK FX Rates: The Same Snippet of Time
In the same three month period, you will notice a clear trend for the AUD/DKK. The FX rates went from 5.80 plus to under 5.20 in three months. The DKK actually gained in value on a long run. This is not to say it has not had a few ups and downs in those three months. In actuality the start of June has a bit of profit taking before it went to 5.30.
You can tell that many felt the run for the trend was over because of a new profit taking point in mid June taking the rate back to 5.40 approximately. From Mid June FX rates on this pairing have been trading in a range between 5.20 and 5.30, with a couple of outliers and no breakouts. In this case you might have considered going long term on the AUD/DKK in favour of the DKK. You would have shorted the AUD by selling it to buy DKK, but kept the trade open for a few weeks to a month.