Currency pairs often move in correlation with each other, either in the same direction or the exact opposite. Examples of pairs that tend to have a strong negative correlation are the EURUSD and the USDCHF. An example of a pair that has a strong positive correlation with each other are the GBPJPY and the EURJPY. Check the charts and watch for another pair that has a strong relationship to your chosen pair. These can server either as a leading indicator or a confirmation depending on the relationship between the pairs. Please remember that these trends do not hold water all the time. Watch these in correlation with your other indicators.
Currency pairs that tend to have a correlating relationship:
EUR/USD and GBP/USD
EUR/USD and NZD/USD
USD/CHF and USD/JPY
AUD/USD and GBP/USD
AUD/USD and EUR/USD
Currency pairs that tend to have an inverse relationship:
EUR/USD and USD/CHF
GBP/USD and USD/JPY
GBP/USD and USD/CHF
AUD/USD and USD/CAD
AUD/USD and USD/JPY
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Marilyn McDonald is an author and foreign exchange trader. She can be reached via her website at www.marilynmcdonald.com
This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our .
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