10 “relationships” to know before investing in the Forex Market!
Knowing the correlations between currencies and commodities is essential for success in Forex trading. More knowledge equals more money.
For this reason I decided to dedicate this post to all those who want to improve their knowledge on this very interesting and liquid market.
Let’s start!
Disclaimer:
The information contained in this blog is purely for illustrative purposes and is in no way a financial advice. Trading is a high-risk business, so don’t invest more than you are willing to lose.
Gold vs AUD/USD
When the Gold goes up the AUD/USD goes up too!
Why?
Australia is the world’s third largest gold producer, extracting and exporting the precious metal for 5 billions a year.
Gold vs NZD/USD
New Zealand also is a great producer of gold, for the same reason mentioned above when the price of gold also rises the pair follows it.
Gold vs USD
During times of crisis or economic uncertainty investors around the world tend to sell the dollar and buy a safe haven asset like gold, which is why when the price of gold rises, the dollar goes down.
Gold vs USD/CHF
26% of Swiss reserves consist of gold, for this reason when the price of gold rises
the Swiss franc is also bought.
Gold vs USD/CAD
Canada is the fifth world producer of this precious metal. When the price of gold rises the currency pair tends to go down.
Oil vs USD/CAD
Canada is one of the largest producers of crude oil in the world. As the price of black gold rises the price of the currency pair goes down.
Gold vs EUR/USD
Both gold and the euro are seen as the antagonists of the dollar, which is why if the price of gold rises also the EUR/USD cross goes up.