Intermarket Analysis
How markets connect and influence each other
Markets don't exist in isolation. Understanding intermarket relationships provides broader context.
Key relationships: - DXY (Dollar Index) inversely correlated with EUR/USD, Gold - Bond yields: Rising yields → currency strengthens (usually) - Gold: Safe haven, inversely correlated with USD - Oil: Affects CAD, NOK, RUB (oil exporters) - S&P 500: Risk sentiment barometer - VIX: Fear index, spikes → risk-off (buy JPY, CHF, Gold)
Commodity currencies: - AUD/USD: Follows iron ore and China sentiment - USD/CAD: Inversely follows oil prices - NZD/USD: Follows dairy and agricultural commodities
Pro tip: Check DXY before trading any USD pair. DXY strength = bearish for all USD quote pairs..
Common mistake: Trading EUR/USD without checking DXY. Better: DXY provides crucial context for all USD pairs. Always check it first..
Key takeaways
- DXY inversely correlated with EUR/USD
- Bond yields drive currency strength
- VIX spikes = risk-off = safe haven buying
- Oil affects CAD/NOK, commodities affect AUD/NZD
Quiz
- When VIX spikes significantly: Answer: JPY and CHF strengthen (risk-off). VIX spikes indicate fear — safe-haven currencies like JPY and CHF strengthen.
Educational content, not financial advice.