Becoming a Pro Trader: Master the Forex Market – Part 7

Intermarket correlations

If	Then	Why
Gold UP	USD DOWN	During times of economic unrest, investors tend to dump the dollar in favor of gold. Unlike other assets, gold maintains its intrinsic value.
Gold UP	AUD/USD UP	Australia is the third biggest gold producer in the world, sailing out about $5 billion worth a year.
Gold UP	NZD/USD UP	New Zealand (rank 25) is also a large producer of gold.
Gold UP	USD/CHF DOWN	Over 25% of Switzerland’s reserves are backed by gold. As gold prices go up, the pair moves down (CHF is bought).
Gold UP	USD/CAD DOWN	Canada is the 5th largest producer of gold in the world. As the gold price goes up, the pair tends to move down (CAD is bought).
Oil UP	USD/CAD DOWN	Canada is one of the top oil producers in the world. It exports around 2 million barrels of oil a day to the U.S. As oil prices go up, the pair moves down.
Gold UP	EUR/USD UP	Since both gold and the euro are considered “anti-dollars,” if the price of gold goes up, EUR/USD may go up as well.
Bond yields UP	Local Currency UP	An economy that offers higher returns on its bonds attracts more investments. This makes its local currency more attractive than that of another economy offering lower returns on its bonds.
Dow DOWN	Nikkei DOWN	The performance of the U.S. economy is closely tied with Japan.
Nikkei DOWN	USD/JPY DOWN	Investors consider the yen as a safe haven and tend to seek it during periods of economic distress.