Trading forex pairs with oil - Profiting with Forex (PFX)

Trading forex pairs with oil

This is the first article in a series we will be doing at www.PFXglobal.com on forex trading and intermarket analysis. Intermarket analysis is a tool that can be used to find trading opportunities in the market. You can also achieve a better understanding of risk and profit potential in longer term trades with this type of analysis. The ideas behind intermarket analysis are relatively simple once the relationships between asset classes (such as oil and the commodity currencies) are clear.

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In this introductory section we will look at the relationship that oil prices have with the "commodity currencies." In the video we will look at monitoring oil prices and several possible forex pairs on a daily basis to be alerted to contrary price movements that can create an immediate trading opportunity. A classic example of this sort of trade occurred this week with the collapse in the NZD/USD following the CPI driven rally. Although this specific example is oriented around a shorter term (multi-day) trade, it is just as useful as a measure or risk or a way to time an entry or exit from a longer term trade.

What do you think about intermarket analysis? We have talked previously about the influence that the VIX or equities has on the forex but what other relationships do you want to know about? Let us know in the forums.

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