Correlation between currency pairs is a factor in
trading CFD and should be considered before entering a trade.
In this post is the correlation between the NZD/USD and
EUR/USD, GPB/USD, AUD/USD illustrated visual in the charts under the section
Visual illustration. The purpose is to exemplify the correlation between
currency pairs and give a little inspiration on how to think as a trader.
The correlation between NZD/USD and EUR/USD, GPB/USD,
AUD/USD are usually strong as changes in the USD has effect on all the currency
pairs in the same direction.
Visual illustration
Visual are the charts NZD/USD and EUR/USD, GPB/USD,
AUD/USD illustrated; the charts illustrate how the currency pairs are moving in
the same direction with a small delay.
The NZD/USD is increasing (bullish) approximately at 2:15 and again
at 9:45
which is also the case for the EUR/USD, GPB/USD and AUD/USD; some of the
currency pairs start to rise (bullish) at approximately 9:00 o’clock . The EUR/USD is rising (bullish) for a shorter
period than the NZD/USD, GPB/USD and AUD/USD.
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