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Currency Correlation Trading Strategy



Description

Forex major currencies are in direct correlation with certain goods.  Currencies are closely linked to commodities. These are the Australian Dollar, Canadian Dollar and New Zealand Dollar. Swiss Franc and Japanese Yen are also sensitive to currency movements of commodity prices.

One needs to pay special attention to the global currency market. It is influenced by many factors: supply, demand, political conditions, interest rates and economic growth. All indicators are indicators collected with more updated information. Economic growth and exports are related to domestic industrial production. Forex major currencies are in direct correlation with certain goods.  Currencies are closely linked to commodities. These are the Australian Dollar, Canadian Dollar and New Zealand Dollar. Swiss Franc and Japanese Yen are also sensitive to currency movements of commodity prices.

2Q==

When the US dollar rose against the euro, pound and the yen the following happened:

  • EUR/USD is capped by negative trend lien
  • GBP/USD is capped by negative trend line
  • USD/JPY is supported by rising trend line.

The price of oil affects the industry of countries and their currencies, which is favorable to all those who are engaged in speculative activities trading on the Forex. Predicting the next movement in the market, is the key to making money. However, this simple concept is practically very difficult to apply in practice.

This is due to numerous factors that influence the global market, supply and demand, political and international relations, economic growth, interest rates, and many others. However, some of these factors, such as economic and business growth in the state, is directly dependent on industrial development. Which still depends on what will be the price of oil on world financial markets. This leads to the conclusion that the price of oil is in direct correlation with the values of the currency state, depends on the industry and economic growth.

Of course, this correlation can be positive or negative, depending on whether a country is a major importer or exporter of oil. No matter, the oil price has a significant impact on currency countries. Otherwise, oil prices only affect most currencies of highly developed countries, which include the US Dollar, Canadian Dollar, Japanese Yen and the like.

The price of gold in the stock market can best be traced to the most important and largest market of gold in physical form. Trading in Forex is a highly significant correlation between the gold price on the stock market and the price of currencies. It is notable that this relationship is very volatile because the price of gold depends on many factors. The price of oil acts as an indicator of trends in the exchange USD/CAD. This means that when the price of oil rises USD/CAD falls. When oil prices decline USD/CAD rises.

2Q==




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