Currency Correlations

The table below shows the level of correlation between various currency pairs.



A correlation is similar to an average calculation, and is determined over a period of time. The table was calculated from daily data from year 2000 to 2008. It therefore only reflects the general average level of correlation. It's important to realise that correlations evolve over time, and in just the same way that an average price can be represented as a moving average, so too, a correlation can be represented as a moving correlation. The chart below illustrates 60-day moving correlations for 3 currency pairs, and shows how drammatic changes in correlation can quickly develop.

Recent Trades

Pivot Bar Trade

It's not often I trade pivot bars, but this trade worked well for me today. The pivot bar is indicated by the green arrow on the chart, with the blue line representing my exit point. Entry was one pip about the high of the pivot bar, with a stop one pip below.