The forex market (currencies) is designed in pairs, a good understanding of how these pairs work will give you a smarter way to trade the market, that being said, currency pairs can be related in their movement.
They can move in different or the same direction, in this article we are going to list currency pairs that share this correlation, also we will mention currency pairs that move together.
CURRENCY PAIRS CORRELATION TABLE
The currency pairs correlation table is a list of currencies and how they are related in terms of their strength, weakness, similarities, and differences. The relationship between these currencies is important as what happens in one currency pair can affect the other in the opposite or the same direction.
| EUR/USD | GBP/USD | AUD/USD | GBP/JPY | EUR/JPY | EUR/GBP | USD/JPY | USD/CHF | USD/CAD | |
| EUR/USD | 77 | 75 | 66 | 50 | -43 | -46 | -77 | -79 | |
| GBP/USD | 77 | 70 | 88 | 19 | -90 | -50 | -57 | -85 | |
| AUD/USD | 75 | 70 | 60 | 31 | -49 | -41 | -36 | -68 | |
| GBP/JPY | 66 | 88 | 60 | 54 | -80 | -9 | -36 | -76 | |
| EUR/JPY | 50 | 19 | 31 | 54 | 7 | 54 | -18 | -31 | |
| EUR/GBP | -43 | -90 | -49 | -80 | 7 | 49 | 30 | 68 | |
| USD/JPY | -46 | -56 | -41 | -9 | 54 | 49 | 57 | 45 | |
| USD/CHF | -77 | -57 | -36 | -36 | 18 | 30 | 57 | 70 | |
| USD/CAD | -79 | -85 | -68 | -76 | -31 | 68 | 45 | 70 |
CURRENCY PAIRS THAT MOVE TOGETHER
These are the currency pairs that move together;
USDCHF/USDJPY
EURUSD/NZDUSD
AUDUSD/NZDUSD
EURUSD/GPBUSD
EURUSD/AUDUSD
CORRELATION COEFFICIENT FORMULAE
Below is the Correlation Coefficient Formulae;
CURRENCY CORRELATION STRATEGY
The currency correlation strategy is going bull or short on a currency pair based on the market direction of another currency pair. For example below is an image showing side by side currency correlation of AUD/JPY and EUR/JPY. This strategy can only be applied for currency pairs that move in the same direction.
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CURRENCY PAIRS THAT MOVE IN OPPOSITE DIRECTION
There are currency pairs that move in the opposite directions, this means that when one pair is bullish the other is bearish.
Below is a list of currency pairs that move in the opposite direction.
USD/JPY—–AUD/USD
USD/CAD—–AUD/USD
GPB/USD——USD/CHF
EUR/USD——USD/CHF
GBP/USD——USD/JPY
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MOST VOLATILE EXOTIC CURRENCY PAIR
One thing exotic currency pair brings to mind is volatility. Exotic currency pairs are volatile because countries that are pairs together have a much stronger economic strength when compared; that is the weaker country has a less diversified economy than the much stable ones. For example USD/ZAR and USD/MXN.
Here are lists of the most volatile currency pair.
USD/ZAR
USD/MXN
USD/TRY
USD/BRL
USD/KRW
GPB/AUD
GBP/NZD
PAIRS LIKE GBPJPY
GBPJPY is a volatile pair and usually comes with a high spread; there are other forex cross pairs that share its volatility similarities. These pairs are
USD/JPY
EUR/JPY
EUR/CAD
WHICH CURRENCY PAIRS MOVE THE MOST?
The currency pairs that move the most can be subject to change based on their demand and supply at the time.
However, in all the currency pairs that move the most are the exotic pairs which are
USD/ILS
USD/INR
USD/SEK
USD/SGD
USD/TRY
USB/BRL
USD/DKK
USD/HKD
USD/MXN
USD/ZAR
Below are comparative images showing all major pairs, cross pairs, and exotic pairs and their volatility rate.
WHAT FOREX CURRENCY PAIRS MOVE THE SAME?
These are the currency pairs that move the same;
USDCHF/USDJPY
EURUSD/NZDUSD
AUDUSD/NZDUSD
EURUSD/GPBUSD
EURUSD/AUDUSD
DO GBP PAIRS MOVE TOGETHER?
GBP pairs move together but not all the time as they are paired with other quote currencies.
These quote currencies they are paired with differ in their economic strength and the fluctuations experienced by the country’s economy will always affect the quote currency. (Global event) therefore could change the trend of that particular currency pair.
WHICH FOREX PAIRS ARE MOST CORRELATED?
These are the top 5 forex pairs that are most correlated;
AUD/USD Vs NZD/USD = 87% correlated.
EUR/USD Vs GBP/USD = 89% correlated.
EUR/USD Vs USD/CHF = -91% correlated.
GBP/USD Vs USD/CAD = -88% correlated.
GBP/USD Vs USD/CHF = -93% correlated.
DOES EUR/USD AND GPB/USD MOVE THE SAME?
EUR/USD and GBP/USD can move in the same direction but not all the time.
These two countries have shared strong economic ties for a very long time; this is why they tend to move in the same direction in the forex market.
DOES GBPJPY AND USDJPY CORRELATE?
Correlation in the forex market does change, this is why a currency pair can have a positive correlation today and Negative correlation in the future. However, GPB/JPY has a negative correlation with Gold.
DOES GBPAUD AND GBPUSD CORRELATE?
The GPGAUD and GPBUSD correlation is +48%
WHAT PAIR CORRELATES WITH AUDJPY?
These are some AUDJPY correlations;
Currencies correlation
AUDJPY – USDNOK -78.8%
AUDJPY – USDSEK -75.6%
AUDJPY – GBPNOK -76.4%
AUDJPY – EURNZD -77.6%
Note that correlation among currencies could change in the future.
WHAT PAIR CORRELATES WITH GOLD?
Gold had a positive correlation with AUDUSD currency pair and a negative correlation with the GBPJPY currency pair.
Positive correlation-same direction
Negative correlation-opposite direction
According to babypis.com, the historical data is about 80%.
WHAT PAIR CORRELATES WITH GBPJPY?
Apart from the Negative correlation with Gold, below are other top negative GPBJPY correlations.
GBPJPY – EURAUD -79.6%
GBPJPY – EURNOK -85.0%
GBPJPY – EURNZD -67.1%
GBPJPY – USDCAD -84.1%