Forex Trading VS Commodities:
Relationships between currencies and commodities exist throughout the financial markets. Find out how to trade these trends.
1- OIL ? USD/CAD About 45% of all U.S. Crude Oil imports come from Canada thanks to its advantageous location. Logically, USA causes huge demand for Canadian dollar (CAD) when the price of Crude Oil increases.
When Crude Oil’s value increases, go short (sell) on the USD/CAD. Historically, this correlation has been 70% accurate if all other currency affecting factors are neutral.
2- OIL ? CAD/JPY While Canada is a net exporter of Crude Oil, Japan imports 99% of it. In addition, Japan is the fourth biggest consumer country of Crude Oil, because it makes up nearly 47% of all Japan’s energy resources.
When Crude Oil price increases, go long (buy) on the CAD/JPY, if all other affecting factors are neutral.
Beware that trading CAD/JPY involes higher risk as the pair generally has bigger spreads (difference between bid and ask price), because it’s traded less than the USD/CAD currency pair.
3- GOLD ? AUD/USD Follow the AUD/USD currency pair and Gold prices, as analysts have observed an 89% correlation between both investment instruments, when all other factors are neutral.
– When USD value decreases, demand for Gold increases
– Higher demand for Gold favours exports and the trade balance for Australia
– Higher exports strengthen the Australian Dollar against USD
– As a result, the AUD value goes up along with the value of Gold.
4- GOLD ? USD/CHF Switzerland also has a strong interest in gold, as 25% of their currency reserves are stored in gold. Because of their gold stores, the Swiss franc increases in value.
Remmeber, the AUD/USD pair correlates positively with gold, while the USD/CHF pair correlates negatively with gold. In both cases, the USD is getting weaker, but in the USD/CHF pair, the USD is the base currency.
When the Swiss franc gains strength, the USD/CHF pair declines.
You can now benefit from LDN company’s services through the LDN Global Markets trading platform.
I’m a Trader with 17 years of experience in the most of Financial Markets ( Equities, Commodities , Forex). I have worked on integrated campaigns for major clients such as Al Horria brokerage, Venus International and Admiral Markets.
Until recently, I Trade in Only the International Markets industry. In this role I was focused on Trading and Portfolio Managing .Successes included creating a social expert to mange the accounts of my clients automatically decisions.
Colleagues know me as a highly creative Trader who can always be trusted to come up with a new techniques . But I know that the client’s business comes first, and I never try to impose my ideas on others. Instead, I spend a lot of time understanding and collecting data about the several markets I can work well alone, but I’m at my best collaborating with others.
I have a PhD from AIN SHAMS University and a Cfte1 from the International Federation of Technical Analysts IFTA.
