Intermarket correlations in forex requires you to analyze different global economic markets in relation to their currencies.
This lesson will see overview of what we covered about intermarket correlations in forex from previous lessons.
The global market economy is comprises of securities such as bonds, and other government financial securities.
It also comprises of, stock indices, commodities such as gold, oil, natural resources and agricultural products and currencies.
The commodities, bonds and stocks are often affected by fluctuations of the prices of currencies.
Therefore, this has established a strong inter-market correlation between the global economic market and their respective currencies.
Intermarket correlations in Forex
How Commodity Prices Affect Currency Movement
The table below shows a summary on how major commodities affect forex market. These major commodities include; Gold and Oil. We discussed with examples and details in our previous lessons.
Just as we mentioned in previous lessons, commodity price fluctuations greatly affect certain currencies much greater than others.
Take a look below;
| CASE | REASON |
| If Gold moves up, USD falls |
Investors tend to purchase more of gold during economic unrest. This is because apart from gold being a safe haven, it maintains its intrinsic value for long. |
| When Gold moves up, AUD/USD also goes up | Australia is one of the major exporters of Gold in the world contributing about 80% of gold to the market. Therefore, its economy is highly boosted by gold. |
| Contrarly, when Gold moves up, USD/CHF also moves down | Over 25% of switzerlands reserves is backed up with gold. Consequently, increase in the gold prices boosts the CHF |
| When Oil appreciates, USD/CAD falls | Canada is one of the major oil exporters in the world. About 85% of its oil to the US economy is from Canada. When oil prices increase the CAD appreciates . |
| When Dow falls the Nikkie falls too | It is equal to the Dow Jones industrial average in America. |
Why is it hard for most traders to maintain consistent profits in trading?
You would be suprised at reasons why most Forex Traders fail to Make Money from Trading. They are simple reasons mostly emotional. Out of 100, only 5% of the traders have managed to make CONSISTENT profits and the 95% have failed. Out of 95%, 99% are the new traders....
- Oh, bother! No topics were found here.
