News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • British Pound Price Forecast: GBP/USD, GBP/JPY, GBP/CHF, EUR/GBP - https://www.dailyfx.com/forex/technical/home/analysis/gbp-usd/2021/03/03/British-Pound-Price-Forecast-GBPUSD-GBPJPY-GBPCHF-EURGBP.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $GBP $EURGBP $GBPUSD $GBPCHF $GBPJPY https://t.co/qt3954gQ53
  • (Analyst Pick) Japanese Yen Outlook: USD/JPY May Fall But Broader Path Remains Bullish #Yen $USDJPY #JPY https://www.dailyfx.com/forex/analyst_picks/todays_picks/daniel_dubrovsky/2021/03/03/Japanese-Yen-Outlook-USDJPY-May-Fall-But-Broader-Path-Remains-Bullish.html?ref-author=Dubrovsky&QPID=917702&CHID=9 https://t.co/bGlHiuTCBn
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 91.52%, while traders in Germany 30 are at opposite extremes with 71.77%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/2Gl2SlMure
  • Update on #Cryptocurrencies #BITCOIN +2.89% #BITCOINCASH +3.09% #ETHEREUM +3.88% #RIPPLE +1.65% #LITECOIN +5.79%
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/GVZ0RT2Zh3
  • BoJ's Kataoka: Hard to see inflation nearing 2% Will keep making utmost effort toward price target - BBG #BoJ $JPY
  • 🇨🇳 Caixin Services PMI (FEB) Actual: 51.5 Previous: 52.0 https://www.dailyfx.com/economic-calendar#2021-03-03
  • BoJ's Kataoka: Desirable to lower rates to strengthen easing Will add stimulus without hesitation if needed Will extend special funding program if necessary - BBG #BoJ $JPY
  • RT @BrendanFaganFx: AUD/USD Eyes February High After Australian Q4 GDP Beat $AUD $USD Link: https://www.dailyfx.com/forex/market_alert/2021/03/03/AUDUSD-Eyes-February-High-After-Australian-Q4-GDP-Beat.html
  • BOJ's Kataoka says it is appropriate to link forward guidance to a price target - BBG $USDJPY
Beware Unexpected Correlations Trading Patterns and Fundamentals

Beware Unexpected Correlations Trading Patterns and Fundamentals

John Kicklighter, Chief Strategist

Talking Points:

• Underlying speculative motivations can generate unexpected correlations across seemingly unrelated assets/markets

• The 'risk' connection is the most decisive link; but commodities, US Fed policy and exchange management sync

• It is good practice to run a quick correlation coeffiecent between planned setups and existing trades

See the DailyFX Analysts' 1Q forecasts for Equities - as well as the Dollar, Euro, Pound and Gold - in the DailyFX Trading Guides page.

Having a robust strategy to select sound trade opportunities and practicing judicious money management to control risk over time is crucial to success. Yet, these elements alone may not be enough to ensure prosperity in the markets. One stealth risk that frequently undermines performance is unexpected correlation across market exposure. While two trades may have checked off all the requirements for a good standalone positions and seem different, there may be a fundamental or conditional correlation between them. This link can effectively leverage up on a single trading idea or even offset the potential each presents individually. Among the most remarkable correlations in the financial system today are those assets that can trace back to general risk trends, US monetary policy and commodities. However, there are also those links that we expect to hold which pose a risk if they inversely fail - such as loose pegs of certain currencies to the Dollar and Euro. We discuss the importance of measuring correlations and look at some of the most pressing relationships in the markets today in today's Strategy Video.

Sign up for John’s email distribution list, here.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES