EUR/USD and USD/CHF are:

Negatively correlated. They tend to move in opposite directions (negative correlation ~-0.90).

Correlation Trading

Understanding how markets move together

Currency correlation measures how pairs move relative to each other. Correlation ranges from -1 (perfect inverse) to +1 (perfect positive).

Key correlations: - EUR/USD and GBP/USD: Positively correlated (~0.85) - EUR/USD and USD/CHF: Negatively correlated (~-0.90) - AUD/USD and Gold: Positively correlated - USD/CAD and Oil: Negatively correlated

Practical applications: - Don't double risk by trading two positively correlated pairs - Use negative correlation for hedging - Divergence between correlated pairs can signal opportunities

Pro tip: Check ScaleEdge's Correlation Matrix tool to see real-time correlation data.

Common mistake: Going long EUR/USD AND long GBP/USD with full risk on each. Better: These are ~85% correlated — you're essentially doubling your risk on the same trade.

Key takeaways

Positive correlation = move together
Negative correlation = move opposite
Avoid trading multiple correlated pairs (doubles risk)
Use correlations for hedging

Quiz

EUR/USD and USD/CHF are: Answer: Negatively correlated. They tend to move in opposite directions (negative correlation ~-0.90).

Educational content, not financial advice.