What is OANDA's Currensee? How to use it for Forex trading?

Strategy using Currensee Correlation

Use OANDA Currensee Correlation to find the protagonist of the market.

If you use the Currensee Correlation (currency correlation) table, plus the short-term correlation of each currency pair, the long-term correlation will become clear at a glance. Using this correlation, if you can find the currency that plays the leading role in the current foreign exchange market, you can more effectively select a favorable currency pair.

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Focus on long-term and short-term correlation

The Currensee Correlation above shows the situation of major currency pairs. (As of 10:00 on March 28, 2017) shows the correlation between EURUSD and other currency pairs.

First, pay attention to the relationship with USDJPY.

When there is a fluctuation centered on the US dollar, EURUSD and USDJPY are inversely correlated (blue). When the yen and the euro are the center, the inverse correlation is weak.

In the above example, it can be confirmed that in addition to the formation of a slightly stronger inverse correlation in the year, it also forms a strong inverse correlation from the perspective of 6 months and 1 week, and fluctuates centered on the US dollar.

However, it can be confirmed that there have been fluctuations that are not centered on the U.S. dollar in the last hour and one day. The information that can be read here is that although the US dollar-centered market continues, it has recently begun to see slight changes in its relationship.

In addition, also check the situation of GBPUSD and AUDUSD.

The correlation with GBPUSD is relatively strong during the period of 1 year, 1 week, and 1 day. Although it can be confirmed that the US dollar is the center of fluctuations, the relationship with AUDUSD is not so obvious. If you check for 1 week, you can also confirm that there is an inverse correlation.

Since the Australian dollar is a currency that has a strong correlation with resource prices and the stock market, there is a tendency that the correlation between EURUSD and AUDUSD is not strong.

By the way, in this case, due to the weak stock market and low resource prices, the Australian dollar has experienced a weak transition.

Next, take a look at the correlation between EURJPY and EURGBP and other currency pairs other than the U.S. dollar.

If you look at EURJPY and EURGBP, you can confirm that the blue and red are alternated, and it is difficult to grasp the correlation. Due to the weak correlation with the yen and the pound, it can be confirmed that the euro is not the center of the market. When the euro dominates the volatile market, the correlation with these currencies is relatively strong. Therefore, among the three currency pairs, USDJPY, EURUSD, and EURJPY, it is generally more likely to have a sense of direction compared to the USDJPY and EURUSD direct currency pairs. By the way, in the case of this example, as the stock market fluctuates up and down, the yen also fluctuates greatly.

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