CFD Trading: Correlation between Currency Pairs Part 2

In the post CFD Trading: Correlation between Currency Pairs is written about the correlation between the currency pairs.

In this post is illustrated the correlation between the EURUSD and the USDCHF; the correlation between the EURUSD and the USDJYP is also illustrated.

Correlation between EUR/USD and USD/CHF

The chart illustrates the EURUSD and the USDCHF; the EURUSD starts to fall around 3 o’clock and the USDCHF starts to rise around 3 o’clock; the 4, 9 and 18 period moving averages are also crossing each other around 3 o’clock; they are reverse; at the EURUSD chart are the 18 period line above the 4 and 9 period lines; at the USDCHF chart are the 18 period line below the 4 and 9 period lines.

Correlation between EUR/USD and USD/JYP

The chart illustrates the EURUSD and the USDJYP; the EURUSD starts to fall around 3 o’clock and the USDJYP starts to rise around 3 o’clock; the 4, 9 and 18 period moving averages are also crossing each other around 3 o’clock; they are reverse; at the EURUSD chart are the 18 period line above the 4 and 9 period lines; at the USDJYP chart are the 18 period line below the 4 and 9 period lines. 

The charts are illustrative but the print is from a real chart; the correlation between currency pairs is stronger or weaker over a time period. 

CFD Trading: Trading with the 4, 9 and 18 Period Simple Moving Average

The simple moving average is described in the post CFD Trading: The Simple Moving Average.

In this post is described how to trade with the 4, 9 and 18 period simple moving average and how to read the signals they provide.

The 4, 9 and 18 Period Simple Moving Average

The 4, 9 and 18 period moving average is a common used.

When the 4 and 9 period moving average crosses each other is the first signal given that a change is in the price development is started. The change is confirmed when the 4 and 9 moving average is above the 18 period moving average.

An example

In the image is the AUDUSD price chart; in the chart are the 3 simple moving averages; the 4 period is the blue line; the 9 period is the lime line and the 18 period is the red line.  

The example illustrates how the price line starts to change from and up going development to and down going development as the three simple moving averages is crossing each other as described in the beginning of this post.  

The same price line is in the image below illustrated with price bars.